IT : Where tax was deducted by assessee, even if same was under wrong provisions, section 40(a)(ia) cannot be invoked to disallow same
IT : Paintings used in office or given on hire for Ad film shooting would be part of furniture and fixtures eligible for depreciation
■■■
[2014] 49 taxmann.com 187 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'H'
Highlight Pictures (India) (P.) Ltd.
v.
Assistant Commissioner of Income-tax*
B.RAMAKOTAIAH, ACCOUNTANT MEMBER
AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER
IT APPEAL NO. 5826 (MUM.) OF 2011
[ASSESSMENT YEAR 2008-09]
AUGUST 30, 2013
I. Section 40(a)(ia) of the Income-tax Act, 1961 - Business disallowance - Interest, etc. paid to a resident without deduction of tax at source (Short deduction) - Assessment year 2008-09 - Whether provisions of section 40(a)(ia) can be invoked only when tax has not been deducted or has not been paid as per provisions - Held, yes - Whether when tax was deducted by assessee, even under bona fide impression under wrong provisions of TDS, provisions of section 40(a)(ia) cannot be invoked - Held, yes [Para 7] [In favour of assessee]
II. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of (Paintings) - Assessment year 2008-09 - Assessee was in business of producing advertisement films as well as in assisting in locations, settings, etc. - According to assessee, hiring of paintings for original shoots was unaffordable and, therefore, assessee purchased and utilized paintings - These were either hung in office or given to producers for original shoots or used in various settings - Assessee claimed depreciation on said paintings - Whether such paintings were part of furnitures and fixtures and, hence, assessee was entitled to depreciation accordingly - Held, yes [Para 10] [In favour of assessee]
III. Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Non-verifiable cash expenses) - Assessment year 2008-09 – Assessee-company made cash payment in respect of art designing, location hire, production shoot expenses, travelling and wardrobe expenses - Said cash payment was about 5 per cent of total expenses incurred by assessee - Assessing Officer disallowed 25 per cent of cash expenditure on ground of non-verifiability of expenditure - Whether in view of fact that assessee's business required on-site expenditure for various production shootings disallowance of 25 per cent of cash expenses was not warranted - Held, yes - Whether, however, since expenditure was not verifiable in nature, disallowance could be restricted to 5 per cent of cash expenses - Held, yes [Para 12] [Partly in favour of assessee]
IT : Paintings used in office or given on hire for Ad film shooting would be part of furniture and fixtures eligible for depreciation
■■■
[2014] 49 taxmann.com 187 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'H'
Highlight Pictures (India) (P.) Ltd.
v.
Assistant Commissioner of Income-tax*
B.RAMAKOTAIAH, ACCOUNTANT MEMBER
AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER
IT APPEAL NO. 5826 (MUM.) OF 2011
[ASSESSMENT YEAR 2008-09]
AUGUST 30, 2013
I. Section 40(a)(ia) of the Income-tax Act, 1961 - Business disallowance - Interest, etc. paid to a resident without deduction of tax at source (Short deduction) - Assessment year 2008-09 - Whether provisions of section 40(a)(ia) can be invoked only when tax has not been deducted or has not been paid as per provisions - Held, yes - Whether when tax was deducted by assessee, even under bona fide impression under wrong provisions of TDS, provisions of section 40(a)(ia) cannot be invoked - Held, yes [Para 7] [In favour of assessee]
II. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of (Paintings) - Assessment year 2008-09 - Assessee was in business of producing advertisement films as well as in assisting in locations, settings, etc. - According to assessee, hiring of paintings for original shoots was unaffordable and, therefore, assessee purchased and utilized paintings - These were either hung in office or given to producers for original shoots or used in various settings - Assessee claimed depreciation on said paintings - Whether such paintings were part of furnitures and fixtures and, hence, assessee was entitled to depreciation accordingly - Held, yes [Para 10] [In favour of assessee]
III. Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Non-verifiable cash expenses) - Assessment year 2008-09 – Assessee-company made cash payment in respect of art designing, location hire, production shoot expenses, travelling and wardrobe expenses - Said cash payment was about 5 per cent of total expenses incurred by assessee - Assessing Officer disallowed 25 per cent of cash expenditure on ground of non-verifiability of expenditure - Whether in view of fact that assessee's business required on-site expenditure for various production shootings disallowance of 25 per cent of cash expenses was not warranted - Held, yes - Whether, however, since expenditure was not verifiable in nature, disallowance could be restricted to 5 per cent of cash expenses - Held, yes [Para 12] [Partly in favour of assessee]
No comments:
Post a Comment