COMMISSIONER OF INCOME TAX Vs. HONEST PUBLICITY

JUDGEMENT

(1.) THE present tax appeal has been preferred by the Revenue challenging the impugned judgment and order dt. 18th May, 2012 passed by the Tribunal, Ahmedabad in ITA No. 2758/Ahd/2009 with respect to the asst. yr. 2006 -07 [reported as ITO vs. Honest Publicity : (2012) 148 TTJ (Ahd)(UO) 22 - -Ed.] by which the Tribunal has dismissed the said appeal preferred by the Revenue confirming the order passed by the CIT(A) deleting the addition made on account of disallowance under s. 40(a)(ia) of the IT Act amounting to Rs. 29,78,272 by the AO. The facts leading to the present tax appeal in a nutshell are as under.

(2.) THE assessee was engaged in the business of advertising working as an agent in some newspapers. During the assessment proceedings with respect to the assessment year in question, the AO observed that the assessee claimed the advertisement expenses of Rs. 1,07,12,129 to various parties including media. The assessee was asked to furnish complete details in respect of the aforesaid payment. On verification of the details furnished by the assessee, it was found that the assessee has paid/credited Rs. 29,78,272. On verification it was observed by the AO that the assessee has not deducted TDS from the above -mentioned amount of Rs. 29,78,272 as per the provisions of s. 194C of the IT Act. As the assessee could not furnish the details of the TDS on the aforesaid amount, the AO was of the opinion that the assessee has violated the provisions of TDS by not deducting the same under s. 194C of the Act and, therefore, he disallowed the expenses i.e. Rs. 29,78,272 and added to the income of the assessee under s. 40(a)(ia) of the Act.

(3.) BEING aggrieved and dissatisfied with the impugned order passed by the CIT(A) in directing to delete the addition of Rs. 29,78,272 under s. 40(a)(ia) of the IT Act, the Revenue preferred appeal before the Tribunal and by impugned judgment and order the Tribunal has dismissed the appeal confirming the order passed by the CIT(A).