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TMI Blog2023 (3) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... 32/Kol/2007 for the assessment year 2004-05. This appeal was admitted on 8th September, 2008 for the following substantial question of law: "Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in law in holding that trade discount allowed by the assessee to INS accredited Advertising Agent was not in the nature of Commission and therefore not subjected to TDS under the provision of Section 194H of the Income Tax Act" We have heard Mr. Tilak Mitra, learned standing counsel appearing for the appellant/revenue and Mr. J.P. Khaitan, learned senior counsel assisted by Mr. Agnibesh Sengupta, learned advocate appearing for the respondent/assessee. The substantial question of law which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Director, Prasar Bharati Vs. Commissioner of Income Tax, reported in (2018) 403 ITR 161 (SC). On going through the decision in the case of Prasar Bharati (supra) we find that the case is clearly distinguishable on facts. In fact, the decision of the Kerala High Court reported in (2010) 325 ITR 205 (Ker.) considered by the High Court of Allahabad in the case of Jagran Prakashan Ltd. Vs. Deputy Commissioner of Income Tax (TDS), reported in (2012) 345 ITR 288 (All.) and the decision was distinguishable. When the matter travelled upto the Hon'ble Supreme Court, at the instance of Prasar Bharati, in paragraph 37 of the judgement reported in (2018) 403 ITR 161 (SC) the Hon'ble Supreme Court noted the decision of the Allahabad High Court in Jag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by advertising companies from media companies for canvassing/booking advertisements (typically 15% of the billing) is 'commission' or 'discount'. It has been argued by the assessees that since the relationship between the media company and the advertising company is on a principal-to-principal basis, such payments are in the nature of trade discount and not commission and, therefore, outside the purview of TDS under section 194H. The Department, on the other hand, has taken the stand in some cases that since the advertising agencies act on behalf of the media companies for procuring advertisements, the margin retained by the former amounts to constructive payment of commission and, accordingly, TDS under section 194H is attracted. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies to the advertising agency for booking or procuring of or canvassing for advertisements. It has been further clarified that the word 'commission' referred to Question No.27 of the Board's Circular No.715 dated 8th August, 1995 does not refer to payments by media companies to advertising companies for booking of advertisements but to payment for engagement of models, artists, photographers, sportspersons, etc. and, therefore, is not relevant to the issue of TDS referred in this Circular. Thus, the legal position as understood by the CBDT is clearly in favour of the respondent/assessee. On going through the order passed by the Tribunal, we find that the Tribunal deeply examined the factual position more importantly, the various clau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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