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2009 (11) TMI 400 - KERALA HIGH COURTDeduction of tax at source- whether the Income-tax Appellate Tribunal was justified in holding that the commission paid by the Doordarshan Kendra which is under the control of the respondent to advertising agencies for advertisements canvassed by them does not attract the provisions of section 194H of the Income-tax Act, 1961, which provides for deduction of tax at source on payments of commission or brokerage. Held that- the transaction was a pure agency agreement between Doordarshan and advertising agencies because one act for the other and the act of the agent bind Doordarshan in its capacity as principal. Thus it fell with in the definition of commission. Thus tax deducted at source on the commission charges of 15 percent. had to be paid by Doordarshan to the Income Tax Department with reference to the date on which 85 percent of the advertisement charges were received from the agent.
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