TMI Blog2018 (2) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Appeal No. 6 / 2018 - - - Dated:- 15-2-2018 - K. S. Jhaveri And Vijay Kumar Vyas, JJ. For the Appellant : Mr. Prabhansh Sharma for Mr. R.B. Mathur JUDGMENT 1. By way of this appeal, the appellant has assailed the judgment and order of the tribunal whereby the tribunal has dismissed the appeal of the department and confirmed the order of CIT(A). 2. Counsel for the appellant has framed following substantial questions of law:- i) Whether in the facts and circumstances of the case, the ITAT was justified in upholding the order of CIT(A) in deleting the addition of ₹ 6637834/- u/s 40(a)(ia) made by the Assessing Officer for non deduction of tax at source and holding the same not to be covered u/s 194H of Income Tax Act. ii) Whether in the facts and circumstances of the case, the ITAT was justified in deleting the addition of ₹ 179838/- made for depositing the employees contribution to PF ESI beyond the prescribed time limit provided in the respective Acts. iii) Whether in the facts and circumstances of the case, the ITAT was justified in holding that the employees contribution to PF ESI are governed by the provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. D/R, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) has deleted the addition by observing as under :- 6.3. I have perused the facts of the case, the assessment order and the submissions of the appellant. An amount of ₹ 7,63,334/- was found debited under the head Interest to Others and included an amount of ₹ 7,24,527/- paid to HDFC Bank being the amount of interest on loan against property. As noted by the Assessing Officer, the assessee was required to furnish the details of loan alongwith the purpose and utilization of such loan. However, no details were produced before the Assessing Officer and this fact has been admitted in appellate proceedings also that the details were not submitted before the Assessing Officer due to oversight. However, in the present proceedings also no details have been submitted. The Authorized Representative has pleaded that since the assessee is behind bars due to some legal cases, he is unable to produce any further details. The Assessing Officer had opined that the assessee is liable to prove that the expenses (interest on loan) were incurred wholly and exclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credited or paid to the persons of whom advertisement is published in news paper. The contention putforth by the assessee has been considered carefully but not found convincing for the reason that the alleged discount claimed to have been allowed to the customers are not discount but infact it is a commission allowed to the persons through whom advertisement is received for publishing in news paper. It is also appropriate to mention here that all persons including laymen know that in this line of business, only commission is given to the middle men through whom advertisements are received. In this line of business, no advertisement can be received without any middlemen or news agency from the remote as well as various corners of the city area. The assessee has also failed to furnish the name complete address of the persons to whom such alleged discount claimed to have been allowed nor filed any copy of credit note in support of his claim. In view of above circumstances, the identity of recipients of the alleged discount as well as contention of assessee remained completely unverified and not subject to verification. Further all the news publishers nominate their news agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t TDS in light of provisions of section 194H of the IT Act and made the impugned disallowance of ₹ 1,31,97,053/- u/s 40(a)(ia) of the IT Act. On careful consideration of the facts, I find that the AO has not made any sort of inquiry from the customers or the advertising agencies. The books of account of the assessee were duly audited and complete details in this regard were available to the AO. The AO had no basis to hold that the discount of ₹ 1,31,97,053/- was allegedly in the nature of commission except for making general observations. While doing so, the AO also ignored the entries in the books of account, the credit notes issued by the assessee to his various customers and advertising agencies. 7. He contended that the Tribunal while considering the matter has observed as under:- In the consideration of entirely of facts and circumstances. We hold that the amount paid by way of discount to the advertisement agencies, springs from a relationship on principal to principal basis and does not constitute commission as contemplated by provisions of Section 194H of the Act. In view thereof, we see no infirmity in the order of the learned CIT(A) in holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or draft or by any other mode, whichever is earlier, deduct Income Tax thereon @ ten per cent: Provided.... Provided.... Provided also that no deduction shall be made under this section on any commission or brokerage payable by Bharat Sanchar Nigam Ltd. or Mahanagar Telephone Nigam Ltd. to their public call office franchisees. Explanation--For the purposes of this section-- (i) 'commission or brokerage' includes any payment received or receivable directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities. During hearing copies of agreements executed by the respondent with two parties are produced. The nature of transactions as stated in Annex. B agreement between Doordarshan and its agencies is as follows: Whereas, for the better regulation of the practice of advertising and to secure the best advertising service for advertisers, the Doordarshan Commercial Service has agreed to allow commission in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment received or receivable directly or indirectly by a person acting on behalf of another person for services rendered. In this case, no one can doubt that 15 per cent commission paid to advertising agencies by the Doordarshan is for canvassing advertisements on behalf of the respondent. So much so, the payment of 15 per cent, by whatever name called, whether discount or commission, falls within the definition of commission as defined under Expln. (i) to Section 194H of the Act. 5. Even though counsel for the respondent has relied on the decision of the Gujarat High Court in Ahmedabad Stamp Vendors Association v. Union of India MANU/GJ/0167/2002 : (2002) 176 CTR (Guj) 193 : (2002) 257 ITR 202 (Guj) and a decision of learned Single Judge of this Court in M.S. Hameed and Ors. v. Director of State Lotteries and Ors. MANU/KE/0446/2001 : (2001) 165 CTR (Ker) 481 : (2001) 249 ITR 186 (Ker) and contended that commission payable cannot be subjected to deduction, we are unable to accept this argument because the case decided by the Gujarat High Court pertains to sale of stamp by the Government to stamp vendors at a discount and the case decided by this Court pertains to sale of lot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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