TMI Blog2017 (6) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... nment. The explanation given for ‘Commission or Brokerage’ in Section 194H of the Act being an inclusive definition, does not exclude the ordinary meaning of ‘Commission’ or ‘Brokerage’. The payment made by the assessee as referral fees is directly proportionate or percentage of an amount received by the assessee for providing CT scan and MRI scan and such payment comes within the term ‘Commission or Brokerage’. In the light of the above said reasoning and ordinary dictionary meaning of ‘Commission’, the order passed by the Assessing Officer u/s. 201(1) and 201(1A) of the Act and which was sustained by the CIT(A) is correct and in accordance with law. - Decided against assessee. - I.T.A. Nos. 456-458/Coch/2016 - - - Dated:- 8-6-2017 - George George K., Judicial Member Revenue by : Shri C. Suresh Kumar, CA Assessee by : Shri A. Dhanaraj, Sr. DR ORDER Per George George K. , Judicial Member These appeals at the instance of the assessee are directed against the consolidated order of the CIT(A) dated 17/06/2016, in relation to the assessment years 2005-06,2006-07 and 2007-08. The order of the CIT(A) arise out of the orders passed u/s. 201 and 201(1A) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amounts for which the assessee is made liable u/s. 201 and 201(1A) of the Act in respect of the assessment years 2005-06 to 2007-08 read as under: AY Amount debited to P L Tax Deductible Interest u/s. 201(1A) Total 2005-06 34,29,556 1,71,478 75,416 2,46,894 2006-07 19,33,632 96,682 30,912 1,27,594 2007-08 39,21,576 1,96,079 39,200 2,35,279 5. Aggrieved by the orders passed u/s. 201 and 201(1A) of the Act in respect of the assessment years 2005-06 to 2007-08, the assessee preferred appeals before the first appellate authority. Before the first appellate authority, it was contended that the relationship between the assessee and the doctors cannot be termed as a principal and agent but on a principal to principal basis and hence, provision of section 194H of the Act does not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent or to the public. It is because of this reason, these amounts are not vouched. 7. In view of the above, it is very clear that the appellant was bound to deduct tax at source on these payments. Had they effected TDS, the recipient doctors would have been forced to disclose this income in their returns of income. By not deducting tax, the appellant helped the recipient doctors to evade tax. Therefore, the decision of the Assessing Officer to invoke the provisions of section 201 rws 194H on these payments is correct. In view of this, I confirm the action of the Assessing Officer for all these three years. 7. The assessee being aggrieved, has filed the present appeals before the Tribunal. It was contended by the Ld. Counsel for the assessee by relying on the Board s Circular No. 5/2012 dated 1-8-2012 that the commission paid to the doctors cannot be termed as freebies. It was submitted that only freebies such as Gift, Travel facility, Hospitality, Cash or monetary grant from the pharmaceutical and allied health sector industries can be disallowed u/s. 37 of the I.T. Act. The learned AR, relying on Board Circular No. 5/12 dated 29/02/2016 contended that the assessee s re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Department or to the general public. Had the assessee effected TDS on these payments, the doctors would have been compelled to disclose this income in their returns of income. The assessee by not deducting tax at source, had aided the doctors to evade income tax which was due to the Central Government. 8.2 The explanation of term Commission or brokerage in section 194H of the I.T. Act is an inclusive definition. An inclusive definition only seeks to specifically include the meaning given in the Explanation within the term Commission or Brokerage . The explanation given for Commission or Brokerage in Section 194H of the Act being an inclusive definition, does not exclude the ordinary meaning of Commission or Brokerage . Therefore, the ordinary or the dictionary meaning of the term Commission or Brokerage also need to be examined. Moreover whether the payment made by the assessee falls within the term Commission or Brokerage is to be examined necessarily from the point of view of the payer/assessee, namely the scanning centre. The assessee payee while making payments as referral fees to the doctors is not providing any professional services. The payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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