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2022 (7) TMI 1333 - AT - Income TaxTDS u/s 195 - Disallowance u/s 40(a)(i) - payment made to Facebook Ireland Limited without deduction of tax at source - payment made by it to Facebook Ireland Limited was for services rendered for uploading and display of banner advertisement - HELD THAT:- Those are employees of Facebook and not the assessee herein. The assessee has merely raised an Invoice on Micromax. There is no use of facebook logo by the assessee as argued by the revenue. We hold that the assessee’s ultimate income is only the commission component of 15%. If assessee is a dependent agent, then where is the question of claiming any deduction for expenditure incurred on behalf of Principal and in that case, how the provisions of section 40(a)(i) of the Act would even come into operation. Hence the reasoning given by the CIT(A) that assessee is an Agency PE cannot be accepted. We find that the entire issue in dispute is no longer res integra in view of the elaborate decision of the Co-ordinate Bench of Bangalore Tribunal in the case of Urban Ladder Home Décor Solutions Pvt Ltd [2021 (8) TMI 927 - ITAT BANGALORE]. This tribunal decision has duly considered other tribunal decisions and also the decision of Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] We hold that the payments made to Facebook Ireland Limited cannot be disallowed u/s 40(a)(i) of the Act in the facts and circumstances of the instant case. Ground raised by the assessee is allowed.
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