TMI Blog2023 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... MADRAS HIGH COURT] as held as a matter of industrial practice it was termed as commission on reinsurance premium received , however, in substance it is discount on re-insurance premium received by an Insurance Company from another Insurance Company. Thus we delete the disallowance made under section 40(a)(ia) - Decided against revenue. - SHRI G.S. PANNU, HON BLE PRESIDENT AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For the Appellant : Mr. Gaurav Jain, Advocate For the Respondent : Sh. Mrinal Kumar Das, Sr. DR ORDER PER SAKTIJIT DEY, JM: Captioned appeal has been filed by the assessee challenging the final assessment order dated 24.01.2023 passed under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 (in short the Act ) pertaining to assessment year 2020-21, in pursuance to the directions of learned Dispute Resolution Panel (DRP). 2. When the stay application was called out for hearing, learned counsel appearing for the assessee submitted that the issue in dispute in the corresponding appeal is squarely covered by the decision of the Tribunal in assessee s own case. Thus, he submitted, the appeal itself can be taken up for hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates of force: Provided that no deduction shall be made under this section from any such income credited or paid before the 1st day of June, 1973:] [Provided further that no deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to, the payee, does not exceed [Fifteen thousand rupees.] Provisions of section Section 40(a)(ia) (ia) thirty per cent of any sum payable to a resident, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, thirty per cent of such sum shall be allowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this issue before the CIT(A) and the finding has been affirmed by the Tribunal. The CIT(A) took note of the decision taken in the assessee s own case for the assessment year 2009-2010 in which the assessment for the year 2008- 2009 was followed and the assessee succeeded before the CIT(A) for the assessment year 2008-2009, wherein the CIT(A) noted that as a matter of industrial practice it was termed as commission on reinsurance premium received , however, in substance it is discount on re-insurance premium received by an Insurance Company from an other Insurance Company. We find that the Tribunal rightly decided the issue in favour of the assessee and the revenue has not brought out any ground to interfere with the said finding. Accordingly, the appeals filed by the revenue on this ground are dismissed and consequently, the substantial question of law is answered against the revenue. 13. The said decision was followed by the another Bench of the Hon ble Madras High Court in the case of CIT vs United India Insurance Co. [2019] 111 taxmann.com 217(Madras). The relevant extract reads as under:- 10. So far as the second, third and fourth substantial questions of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond would be insured. If the insurance company gets business directly from the insured, no payment would be required to be made by the insurance company to the insured by way of commission or otherwise for soliciting or procuring the business for the assessee. If any discount is allowed by the insurance company to the insured, that will not fall within the definition of brokerage or commission paid for soliciting or procuring insurance business. That payment would fall within the category of a discount offered to the insured for giving the business to the insurance company. Even otherwise the payment or deduction would neither be a reward nor remuneration for any service like soliciting or procuring insurance business for the assessee. The assessee- company might be said to have solicited business from the insurance companies in certain cases but the commission credited/paid is not by way of remuneration or reward for soliciting or procuring of insurance business. Remuneration of reward would be related to services rendered in connection with soliciting or procuring business. In the instant case, the payment or discount was made to insurance companies but the payee companies had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in not following the aforesaid Hon ble High Court s decisions. It is to be remembered that there are no contrary High Court s decisions available in this regard much less from Hon ble jurisdictional High Court. The decision of the ITAT Chennai referred by the Ld. DRP cannot overrule the decision of the Hon ble Madras High Court. Moreover, as pointed above by the ld. counsel for the assessee, the same is on different facts. 16. The other limb of ld. counsel for the assessee s submission is that no TDS is required in as much as it is reimbursement of expenses and on the touch stone to the decision of the Hon ble Supreme Court in the case of of DIT(IT)-1 vs Moller Maersk (TS-70- SC-2017), no TDS was required to be deducted. Another plea was that on the basis of proviso to section 201(1) of the Act, since the payees have offered the income to pay tax, no TDS was required to be deducted. We note that since, we have already held that the facts are identical and the issue stands covered in favour of the assessee by the decision of the Hon ble Madras High Court and Hon ble Bombay High Court as above, adjudication, on these aspect are only of academic interest, hence we are not en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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