TMI Blog2017 (12) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the following ground of appeal :- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition on account of disallowance u/s 40(a) (ia) by ignoring the express provision of law u/s 194H and the CBDT circular no. 715 dated 08.08.1995 which states that the tax has to be deducted on the payments made to advertising agency. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred by ignoring the observation of the A.O. that assessee has raised bills in the name of advertising agencies for the cost of space and deducted agency commission towards commission to the advertising agencies which indicates that space was purchased from the assessed on basis of speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee company is engaged in the business of publication of a magazine and it sells space for advertisements to various parties through advertising agencies. AO observed that the assessee company raised bills in the name of advertising agencies indicating cost of the space and deducted the agency commission towards commission to the advertising agencies. This clearly indicates that the space was purchased from the assessee company on the basis of specifications by the actual party and the agency acted as an agent for the assessee company. There is no doubt that the same is being paid to the agencies for their services only and it cannot be termed as a discount as the benefit of that advertisement does not go to the agency. The agency on their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of [ten] per cent From the above provision it is clear that any person who is responsible for paying any income by way of commission or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the prescribed rate. In the instant case no payments are made by the appellant to the agencies. On the other hand, consequent to the sale of space to the agencies, the agencies are billed by the appellant on the net amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collect gross amount and from gross amount itself straightway deduction has been granted to the person who has booked the advertisement on account of volume discount as well as agency commission. It may be seen that in the case of Moon River (M.G. Inds.) the advertisement has not been booked by advertising agency even then amount of ₹ 11,250/- has been reduced on account of agency commission. Therefore, it will clearly demonstrate that assessee is concerned only with the amount to be realized finally which is the same in both type of transactions. Therefore, the nature of amount agency commission is only a discount though it has been described as agency commission . Both the transactions are on principal to principal basis. The case ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
