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August 25, 2022

TDS under Section 194C on payments for the preparation and execution of advertisement content

by CA Shivam Jaiswal in Income Tax, Legal Court Judgement

TDS under Section 194C on payments for the preparation and execution of advertisement content

Facts and Issue of the case

The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the action of the ld. AO by considering the total transactions entered into by the assessee with Social Kinnect by construing it to be in the nature of professional services u/s.194J of the Act.

Observation by the court

The court had heard rival submissions and perused the materials available on record. The assessee is in the business of providing shared services to group companies which includes man power services and infrastructure services. Survey u/s.133A(2A) of the Act was conducted on 04/10/2018. During the course of survey, it was found that assessee had made certain payments to certain parties which were not in compliance with provisions of Chapter XVIIB of the Act. The survey revealed that certain payments made by the assessee were not subjected to deduction of tax at source or tax was deducted at a lesser rate, as the case may be. Accordingly, an order u/s.201/201(1A) was sought to be passed in the hands of the assessee treating the assessee as “assessee in default” u/s.201 of the Act by raising TDS demand and charging interest thereon u/s.201(1A) of the Act on the assessee.

Conclusion

The appeal of the assessee is allowed by the court.

Cowtown-Software-Design-Pvt.-Ltd.-Vs-DCIT-ITAT-Mumbai

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