TMI Blog2017 (11) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue in favour of the assessee, has not made reference to any document or evidence which enabled him to reach the conclusion that the faculty members were franchisees of the assessee company and not its employees. Although the ld. Commissioner of Income Tax(A) has held that the faculties were associated with the assessee on a revenue sharing basis, no evidence has been forthcoming from the assessee to justify this claim We are of the view that the ld. Commissioner of Income Tax(A) has not examined the issue in proper perspective and the relief has been granted to the assessee only on the basis of written submissions made before him. We are of the considered opinion that the issue needs reexamination. As no evidence has been filed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company is in the business of providing academic coaching to its students pursuing Chartered Accountancy Course. During the assessment years under consideration, the assessee allegedly had gross profit sharing arrangements with the different faculties in the field of accountancy and law for the purpose of imparting coaching to the students. As per the assessee, it had paid 70% of the total fees after deducting rent of auditorium and cost of course material to the faculties. The Assessing Officer was of the opinion that tax was deductible at source on the payments/sharing of fees to the faculties u/s 194J of the Act. Thereafter, the Assessing Officer passed orders u/s 201(1)/201(1A) of the Income Tax Act, 1961 raising a tax dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of survey, the Director of the company Shri S. Rashid Masood had accepted that ₹ 51.50 lakh were paid to the faculty members without deducting tax at source during the current financial year 2010-11. The ld. Sr. DR also submitted that taking into account the fact of non-deduction of tax at source on the payments made to faculty members as well as payment of rent without deduction of tax at source, demands raised for both the assessment years in question were legally correct and that the order of the A.O.(TDS) should be upheld. 4. In response, the ld. AR submitted that as far as the issue of deduction of tax at source on payments made to faculties was concerned, the same was covered by the judgment of the Hon ble Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 194J on payments made to faculty members is concerned, the ld. Commissioner of Income Tax(A) has held that in view of the judgments of Hon ble Delhi High Court in the case of Commissioner of Income Tax vs NIIT (supra) and CIT vs Career Launcher India Ltd. (supra), tax u/s 194J was not deductible at source. However, the fact remains that the assessee s plea of profit sharing with the faculty members is not evident from the facts on record. The ld. Commissioner of Income Tax(A), while deciding the issue in favour of the assessee, has not made reference to any document or evidence which enabled him to reach the conclusion that the faculty members were franchisees of the assessee company and not its employees. Although the ld. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the payments made to faculty members to the file of the ld. Commissioner of Income Tax(A) for fresh examination in terms of our observations as above. 5.1 In the result, the appeals filed by the department are allowed for statistical purposes. 5.2 As far as the C.O.s of the assessee are concerned which challenge the confirmation of the tax demand by the ld. Commissioner of Income Tax(A) on payment of rent, we are of the considered opinion that the interest of justice would be served if this issue is also restored to the file of the ld. Commissioner of Income Tax(A) to re-examine the claim of the assessee that no payments exceeding the threshold limit were made by the assessee in both the years under consideration. Accordingly, bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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