TaxTMI 
TaxTMI 
2016 (4) TMI 247
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....r of Income Tax (Appeals)-V, Pune dated 23-01-2014 for assessment year 2009-10. The Revenue has assailed the findings of Commissioner of Income Tax (Appeals) in holding that no tax is to be deducted at source on the payments made to the non-executive Directors of the assessee company in the impugned assessment years. 2. The brief facts of the case as emanating from the records are: The assessee is engaged in the business of manufacturing and sale of internal combustion engines of 3HP and above, generating sets bimetal strips and bearings, engine valves, castings etc. A TDS survey u/s. 133A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was carried out in the case of the assessee on 23-11-2007. During the course of sur....
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....yments made to the non-executive Directors are in the nature of commission. The assessee was liable to deduct tax on such payments u/s. 194H of the Act. The ld. DR prayed for setting aside the order of Commissioner of Income Tax (Appeals) and accepting the appeals of the Revenue. 4. Au contraire, Shri C.H. Naniwadekar appearing on behalf of the assessee strongly defended the orders of Commissioner of Income Tax (Appeals). The ld. DR submitted that the issue raised in the present set of appeals is squarely covered by the decision rendered in the case of Bharat Forge Ltd. Vs. Additional Commissioner of Income Tax (supra). In the said case the Tribunal decided this issue in the light of provisions of section 194J of the Act. The ld. AR subm....
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....n 194H of the Act. The same is reproduced here-in-under: "(i) "commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;" 7. Under the provisions of section 194H tax is to be deducted at source on the payments made to a resident by way of commission (not being insurance commission referred to in section 194D) or brokerage. A bare perusal of the definition would show that it is an inclusive definition which includes payments m....
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....a director : Under the existing provisions of the Income Tax Act, a company, being an employer, is required to deduct tax at the time of payment to its employees including Managing Director/whole time director. However, there is no specific provision for deduction of tax on the remuneration paid to a director which is not in the nature of salary. It is proposed to amend section 194J to provide that tax is required to be deducted on the remuneration paid to a director, which is not in the nature of salary, at the rate of 10% of such remuneration. This amendment will take effect from Ist July, 2012." The provisions of newly inserted clauses are enforceable w.e.f. 01-07-2012, therefore, it will have no application in the a....
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.... a manger under the provisions of the Companies Act and therefore a technical personnel and therefore the company is liable to deduct tax at source under the provisions of section 194J. 8.1 As per the explanation to provisions of section 194J professional service means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board. We, therefore, find force in the submission of the learned counsel for the assessee that sitting fees paid to the directors does not amount to fees paid for any professional services as has been mentioned i....