9911796707
TMI Blog2012 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of Rs.52,22,326/- ignoring the provisions of Section 40(a)(ia) of the Income tax Act, 1961 and the facts that the entire TDS amount has been claimed by assessee company. 3. On the facts and in circumstances of the case and in law, the learned CIT(A) has erred in deleting an addition of Rs.52,22,326/- without appreciating the fact that the commission received from M/s Amadeus India Pvt. Ltd. was rotated through the assessee company and intimately paid to the parties concerned and that the mischief of the provisions of section 194H and 40(a)(ia) of the Income-tax Act, 1961 are clearly attracted." 2. Facts, in brief, as per relevant orders are that return declaring loss of Rs.71,644/- filed on 20.11.2006 by the assessee, engaged in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to money paid by inter serve to the member travel agencies which represents distribution of collected money which cannot be categorized as an expense. We, therefore, submit that it is prudent to recognize only the commission retained by inter serve as its own income. On the other hand, since no expense has incurred by inter serve while making payments to its members, provisions of Chapter XVII-B do not apply to this transaction ...." 3. However, the AO did not accept the submissions of the assessee on the ground that the commission income paid/credited to the assessee by M/s Amadeus India Pvt. Ltd. was the business income of the assessee and was recorded in their books of accounts under the nomenclature of commission income. The receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chargeable under the head profits and gains of business of profession. He pointed out that in the present case the appellant has not claimed deduction for the amounts paid to the various travel agencies and as such the said section has been wrongly invoked by the Assessing Officer. He has further pointed out that the payments made to the various travels agencies represented the amounts which belonged to them. It was further submitted that since the appellant had neither debited the profit and loss account with respect to the payments made to the travel agents nor claimed deduction thereof the action of the Assessing Officer is wholly arbitrary unjustified, unlawful and ought to be quashed. After examination of the P & L account, computat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the commission/fee and thereafter, distribute proportionately amongst the members. While referring to the relevant clauses of the agreement, the ld. AR further pointed out that since assessee was not conducting any business of a travel agency but acted as collecting agency on behalf of member travel agents and in passing on their share of income out of the money received from Amadeus on account of booking by the said travel agents, apparently, the payment made to members was not for any services rendered and thus, the assessee was not liable to deduct any tax at source for distributing the money received from Amadeus amongst constituent members. The said travel agents had shown the amount as their income and paid tax thereon. Inter alia, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat credit for TDS is to be given in the case of the person in whose hands income is taxable and that too in the year in which the corresponding income is taxed. Now adverting to the facts narrated before us, the assessee entered into a consortium agreement with 12 other members who are travel agents for booking air tickets through the platform provided by M/s Amadeus Pvt. Ltd. .In terms of the said agreement dated 01.04.2003, all the member travel agents except the assessee, rendered services of booking air line tickets,& utilized the computerized electronic reservation system platform provided by "Amadeus",who offered preferential rates subject to bulk business being offered by all the travel agents as one entity. The Amadeus maintained o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission amongst the members on priority basis. Though the TDS certificate issued by Amadeus reflected commission of Rs.65,71,690/-, the assessee distributed the amount of Rs.52,22,326/- amongst the members for services rendered by them in booking tickets etc. and amount of Rs.13,49,364/- alone was reflected in the accounts of the assessee. Since the amount of Rs.52,22,326/- was not received for any services rendered by the assessee to Amadeus while tax was also deducted at sources from the income of travel agents transmitted through the assessee, the ld. CIT(A) concluded that the amount could not be treated as income of the assessee. Moreover, since the assessee did not claim the said amount as expenditure in its accounts, no tax was deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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