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2015 (10) TMI 2366 - AT - Income TaxTDS liability from the discount offered to various persons - nature of relationship - Held that:- The hospitals/laboratories are doing dual roles. This is particularly in view of the fact that the assessee is also widely advertising its services through the media and also through display of their name before the laboratories/hospitals. Further, if any of the laboratory is dedicated only for the assessee, then the discount paid to such kind of laboratories would fall in the category of “Commission” only, since the patients should be approaching them to get their tests conducted through the assessee. Neither the assessee nor the tax authorities have brought on record as to how the hospitals/laboratories have approached the assessee, i.e. whether on the specific instruction of the patient or on its own and whether the laboratories/hospitals are dedicated to the assessee only or not, i.e., whether they have such kind of business link with the competitors of the assessee or not. It is also required to be seen as to whether the test reports are given by the assessee directly to the patients referred to by the hospitals/laboratories or they are issued to the hospitals/laboratories, who in turn issue the test results in their own letter heads. This factor will also help to decide about the nature of relationship. Thus all the above facts need to be examined before answering the question about the nature of relationship between the assessee and hospitals/laboratories. This issue requires fresh examination at the end of the assessing officer. Maintenance charges paid to the professionals for maintaining the medical equipment - TDS u/s 194C or 194J - Held that:- Routine, normal maintenance contracts which includes supply of spares will be covered under section 194C. However, where technical services are rendered, the provisions of section 194J will apply in regard to tax deduction at source. CIT(A) was justified in holding that the maintenance charges paid to the professionals for maintaining the medical equipments is a payment falling in the category of contract payments requiring deduction of tax at source u/s 194C of the Act - Decided in favour of assessee.
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