Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2021 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 1140 - HC - Income TaxTDS credit u/s 199 - AO disallowed the assessee's claim on credit of TDS on the ground that the Subscription Charges were not offered to tax in the return of income - assessee contended that it is only a collection agent for M/s.Sun TV Network Limited and that the corresponding subscription income derived from pay channels stood accounted/offered as income in the hands of M/s.Sun TV Network Limited - AO held that the TDS credit relevant to subscription charges could not be allowed in the assessee's hands in view of proviso 1 & 2 to Section 199 of the Income Tax Act - assessee strenuously contended that the amounts received by them from various Cable Operators cannot be construed as their income, but represents the income of their principal viz., M/s.Sun TV Network Limited - HELD THAT:- As per Section 199(2), credit for TDS can be allowed only when the corresponding income is offered for taxation in the year in which such TDS is claimed and deduction of TDS was allowed without the corresponding income being declared in the Profit and Loss Account. As per the Agreement entered into between the respondent and M/s.Sun TV Network Limited and for practical purposes, the invoices were raised by them on various Cable Operators and the TDS certificates were issued by the payers (i.e.) the Cable Operators in the name of the respondent – assessee, the respondent is entitled to claim the credit for the TDS certificates. Merely because the income has been offered and processed in the hands of M/s.Sun TV Network Limited, credit for TDS deducted in the name of the respondent – assessee cannot be denied. It is not in dispute that the respondent – assessee has remitted the entire gross amount received from the Cable Operators to M/s.Sun TV Network Limited. The amount remitted by the respondent to M/s.Sun TV Network Limited includes the amount of TDS deducted by the Cable Operators at the time of payment made by them to the assessee - in lieu of the services rendered by the respondent – assessee, they are entitled to receive the fixed commission. Since tax has already been deducted and paid to the Government at the time of making collections, the assessee is entitled to get credit of the same while receiving the commission income. M/s.Sun TV Network Limited had engaged the services of the respondent for collection of Subscription Charges against the commission. However, the Cable Operators, at the time of payment of subscription, deducted the tax at source and remitted the remaining amount to the assessee. The subscription collected by the assessee cannot be construed as its income and hence, the same is not taxable in the hands of the assessee. Further, the amounts collected by the assessee are credited to separate account viz., “Subscription Charges”. The said account was debited at the end of the Financial Year when the amounts are paid to M/s.Sun TV Network Limited. Since the subscription collected by the assessee from various Cable Operators are not the income of the assessee, the same were not shown in the Profit and Loss Account. The subscription amount is the income of M/s.Sun TV Network Limited and as such, the same is taxable in the hands of M/s.Sun TV Network Limited. The levy of tax on the respondent – assessee would amount to double taxation. As rightly contended by the learned senior counsel appearing for the respondent, since the amended provision Rule 37BA(2)(i) came into effect only on 01.11.2011, the same is not applicable to the cases on hand. Appellate Tribunal was right in holding that the assessee is eligible for TDS credit.
|