TMI Blog2021 (2) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of law cannot, in the facts and circumstance of the present case, be decided in favour of the Revenue and against the Assessee Addition towards payments of commission to Advertising Agents where TDS was not deducted under section 40(a)(ia) r.w. s.194C - whether when commission or brokerage is retained by the agents and not remitted to the principal, it amounts to constructive payments of the same to him by principal and TDS needs to be made from such amount? - HELD THAT:- CBDT Circular No.5/2016 dated 29/2/2016 takes express cognizance of the rulings of Allahabad High Court in Jagran Prakashan Ltd. [ 2012 (5) TMI 488 - ALLAHABAD HIGH COURT] and proceeds to clarify that no TDS is attracted on payments made by television channels/newspaper companies to the advertising agency for booking or procuring of or canvassing for advertisements. The CBDT circular further clarifies that commission referred to in question No.27 of the Board's Circular No.715 dated 8.8.95, does not refer to payments by media companies to advertising companies for booking of advertisements, but to payments for engagements of models, artists, photographers, sportsperson, etc. and therefore, is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructive payments of the same to him by principal and TDS needs to be made from such amount? 3. The Respondent-Assessee is engaged in the business of publishing and selling newspapers. For the Assessment Year 2011-12, the Assessee filed an e-return declaring a total income of ₹ 6,96,80,950/-. The case was selected for scrutiny under CASS. The assessment was finalised vide order dated 28/11/2013 in which the Assessing Officer (AO) held that the Assessee had paid commission to the newspaper vendors to the extent of ₹ 1,36,43,978/- to advertisement agents to the extent of ₹ 2,76,00,979/- aggregating to ₹ 4,12,44,957/- and since, the Assessee had not deducted TDS from such payments, the AO disallowed the deduction of the said amount relying upon the provisions of Section 40(a)(ia) of the Income Tax Act, 196. 4. The Assessee appealed to the Commissioner of Income-Tax (Appeals) who, by his order dated 17/11/2014 reversed the AO's order holding that the relation between the Assessee and the newspaper vendors or the advertisement agents was on a principal-to-principal basis and, therefore, there was no requirement of deducting tax at source on the trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been reversed by the Rajasthan High Court in the case of Hindustan Coca Cola Beverages Pvt. Ltd. vs. Commissioner of Income-Tax [2018] 402 ITR 539 (Raj). He submits that the view of the Kolkata Bench of the ITAT in ACIT vs. Bharti Cellular Ltd. (supra) is at variance with the view taken by the Karnataka High Court in the case of Bharti Airtel Ltd. vs. Deputy CIT [2015] 372 ITR 33 (Karn). He submits that the view taken by the Karnataka High Court has been accepted and followed by this Court in CIT (TDS), Pune vs. M/s. Vodafone Cellular Ltd. ITA Nos.1152, 1274 1995 of 2017 with ITA Nos. 571 1266 of 2018 decided on 27/1/2020. and The CIT (TDS) Pune vs. M/s. Idea Cellular Ltd .ITA No.1129/2017 decided on 13/1/2020. He submits that in any case, the view taken by the Commissioner (Appeals) and the ITAT, is quite consistent with the law laid down by the Gujarat High Court in the case of Ahmedabad Stamp Vendors Association vs. Union of India [2002] 257 ITR 202 (Guj HC). which, in turn, is based on the ruling of the Hon'ble Supreme Court in Bhopal Sugar Industries Ltd. vs. STO (1977) 3 SCC 147. Mr. Naniwadekar, therefore, submits that the first substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustan Coca Cola Beverages P. Ltd. (supra) has expressly been reversed by the Rajasthan High Court in Hindustan Coca Cola Beverages Pvt. Ltd. (supra). 13. Further, we find that the ITAT, in the present case, has relied upon the decision of the Karnataka High Court in Bharti Airtel Ltd. vs. DCIT (supra), which takes a view contrary to the view taken by the ITAT in Bharti Cellular Ltd. (supra) or the Calcutta High Court in Bharti Cellular Ltd. vs. ACIT (supra). This Court in the case of Vodafone Cellular Ltd. (supra) and Idea Cellular Ltd. (supra), has approved the view taken by the ITAT by following the decision of the Karnataka High Court in Bharti Airtel Ltd. (supra). Accordingly, it will not be proper for us to follow the decision of the Kolkata Bench in Bharti Cellular Ltd. (supra) and answer the first substantial question of law in favour of the Revenue and against the Assessee, in the facts and circumstances of the present case. 14. Besides, we note that in the present case, the Commissioner (Appeals), as well as the ITAT, have recorded concurrent findings of fact that the transactions or the dealings between the Assessee and the newspaper vendo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
