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TMI Blog2023 (2) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... e case. 3. We have heard the rival submissions and perused the materials available on record. Oxford University Press India Branch is a branch of Oxford University Press, United Kingdom. Assessee is a non-resident company. Assessee is a department of Oxford University, UK (which has the full legal name of The Chancellor, Masters and Scholars of the University of Oxford). University of Oxford is a civil corporation established under common law which was formally incorporated by the Oxford and Cambridge Act, 1571. The assessee company established its presence in India for the purpose of furthering the objective of excellence in research, scholarship and education of the University of Oxford by publishing worldwide. The assessee is in the business of publishing and selling educational books . Oxford University Press started its operations in India by opening a branch office in Mumbai in 1912. After Mumbai, offices were quickly established in Chennai and Kolkata and an office at Delhi opened in 1972 and the branch obtained the approval from Reserve Bank of India in 1977. The four regional offices located at New Delhi, Kolkata, Chennai and Mumbai serve as a nodal point where the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at own a group of private schools. b) The payment is made by cheque and directly to the concerned society / school and not to any official of these institutions. c) The consideration payable is computed at a certain percentage on the basis of the quantum of books sold to the students of a given school. The intent behind using this yardstick is solely to achieve uniformity in the payments to be made to the schools and avoid any ambiguity in this regard. d) The basis intent of making payments to schools is for the purpose of promoting the business of the assessee to enhance its profitability and hence is for business expediency. e) The payments made to various schools are in the nature of an expenditure incurred wholly and exclusively for the purpose of carrying out the business. f) These payments are not in the nature of commission since there is neither principal -agent relationship between the payer and the recipient nor the recipient has rendered any services to the payer. g) The payments made are not in the nature of donation since the assessee has not made gratuitous payments to these schools. h) These payments to schools do not fall within any provisions under wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses 59,758 Disallowance made by AO is confirmed 34053 8 EXCELLENT EDUCATIONAL AND CULTURAL SOCIETY Sales promotion expenses 113510 Disallowance made by AO is confirmed 34053 9 FCM TRAVEL SOUTIONS (INDIA) PVT Ltd. Sales promotion expenses 81,276 Disallowance made by AO is confirmed 24383 10 BHARTIYA VIDYA BHAVAN'S PUBLIC SCHOOL Sales promotion expenses 76,044 Disallowance made by AO is confirmed 22813 11 CATHOLIC DICESE OF BIJNORE Sales promotion expenses 499019 Disallowance made by AO is confirmed 149706 12 CCMT-CHINMAYA VIDYALAYA Sales promotion expenses 186266 Disallowance made by AO is confirmed 55880 13 IDEAL ASSOCIATION FOR MINORITY EDUCATION Sales promotion expenses 681506 Disallowance made by AO is confirmed 204452 14 DOON INTERNATIONAL SCHOOL Sales promotion expenses 56,160 Disallowance made by AO is confirmed 16848 15 DPS/ALL SAINTS/RAO PAHLAD SINGH SCHOOL Sales promotion expenses 469627 Disallowance made by AO is confirmed 140888 16 DR.K.M.CHERIAN EDUCATIONAL SOCIETY Sales promotion expenses 52,349 Disallowance made by AO is confirmed 15705 17 HI PLUS CREATIONS PVT LTD Sales promotion expenses 623250 Disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not subject to any control or supervision of the assessee and they operate independently without any instructions from the assessee. Accordingly, it was argued that the provisions of section 194H of the Act itself would not come into operation in these facts. On without prejudice basis, it was argued by the ld. AR that as per the second proviso to section 40(a)(ia) of the Act, if the recipients (i.e the schools / societies / trusts) had disclosed the receipts from the assessee as its income and filed their income tax returns, then no disallowance u/s 40(a)(ia) of the Act could be made in the hands of the assessee payer. 8. Per contra, the ld. DR argued that the schools had referred the textbooks of the assessee to the students. But for the reference of the schools to the students, the textbooks of the assessee could not have been sold. Eventhough there is no formal agreement between schools and the assessee, still commission is being determined and paid as a percentage of total sale of textbooks made by the authorized booksellers to the students of a particular school. Moreover, the schools had enabled the sale of textbooks through the booksellers and hence the payment of sch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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