TMI Blog2015 (7) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... - non deduction of tds on commission payment - invoking the provision of section 40(a)(ia) - Held that:- According to the assessee, this is not commission but incentive on collection of money from different places by various persons as per the direction of the team employed by the assessee company. This incentive includes travelling allowance also. We find that this incentive is not given at a fixed rate for payments which is known in the trade as incentive for actual collection and this incentive is in the nature of discount and not commission. Once this is in the nature of discount or can be called as incentive but not commission then the assessee is not liable to deduct TDS on this and accordingly we direct the AO to delete the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 139(1) of the Act. As regards to the disallowance of commission of ₹ 14,21,729/- the assessee has deducted TDS and deposited to the government account on 14.07.2009 as recorded by the AO at page 4 which reads as under:- Furthermore, as discussed above, while examining the TDS deposits to Govt. Accounts with respect to commission payment of ₹ 28,37,898/- in aggregate, on part of the payments it is noted that in several cases the assessee has deducted taxes at source upto the month of February, 2009 which should have been deposited by March' 2009 in the Govt. Account for qualifying as deduction in terms of provisions of section 40(a)(ia) of the I.T. Act, 1961 but the assessee has deposited those taxes on 14/07/2009 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusions Ltd., has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570 the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well. In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs. As the issue stands covered in favour of the assessee and against the revenue we direct the AO to allow the deduction of commission payments because the assessee has paid the TDS and deposited to the govt. account before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO during the course of assessment proceedings noted such incentive at ₹ 48,10,829/- and disallowed the claim of incentive for non deduction of TDS u/s. 194H of the Act by invoking the provisions of section 40(a)(ia) of the Act. Aggrieved assessee preferred appeal before CIT(A), who confirmed the action of AO by observing in para 4 as under:- 4. I have considered the finding of the AO and submission made by the A.R. during appellate proceeding. The first and second ground of appeal are regarding addition by disallowance of commission paid u/s. 40(a)(ia). The facts of the case is the assessee made payment on account of commission and incentive to various agents to the tune of ₹ 76,48,727/- out of this amount, the assessee de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of money from different places by various persons as per the direction of the team employed by the assessee company. This incentive includes travelling allowance also. We find that this incentive is not given at a fixed rate for payments which is known in the trade as incentive for actual collection and this incentive is in the nature of discount and not commission. Once this is in the nature of discount or can be called as incentive but not commission then the assessee is not liable to deduct TDS on this and accordingly we direct the AO to delete the disallowance. This issue of the assessee's appeal is allowed. 8. In the result the appeal of the assessee is allowed. Order pronounced in the court. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
