TaxTMI 
TaxTMI 
2017 (6) TMI 544
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..... Since common issue is raised in these appeals, they were heard together and disposed of by this consolidated order. 3. Grounds raised are identical in all the assessment years, hence grounds pertaining to assessment year 2005-06 are reproduced below: 1. The order of the learned Commissioner of Income Tax(Appeals) in I.T.A. No. 108/RI/CIT/CLT/2008-09 dated 17-06-2016, partly allowing the appeal filed by the appellant for the assessment year 2005-06 is infirm in law and contrary to facts and circumstances of the case. 2. The lower authorities ought to have found that the business promotion expenses are not liable for tax deduction at source and as such, there is no justification to create the demand u/s. 201(1) r.w.s. 1....
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....ction of tax at source was made by the assessee, the Assessing Officer passed orders u/s. 201 and 201(1A) of the Act. The details of the amounts for which the assessee is made liable u/s. 201 and 201(1A) of the Act in respect of the assessment years 2005-06 to 2007-08 read as under: AY Amount debited to P&L Tax Deductible Interest u/s. 201(1A) Total 2005-06 34,29,556 1,71,478 75,416 2,46,894 2006-07 19,33,632 96,682 30,912 1,27,594 2007-08 39,21,576 1,96,079 39,200 2,35,279 5. Aggrieved by the orders passed u/s. 201 and 201(1A) of the Act in respect of the assessment years 2005-06 to 2007-08, the assessee preferred appeals before the first appellate authority. Before t....
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....e payments were made. In the absence of the same, the Revenue is losing tax from the recipient doctors. As the appellant was showing it as deduction by debiting it to the P & L account, it is reducing its taxable income. To avoid this lacunae only, the law for deducting TDS on commission or brokerage in the form of Section 194H in the Income Tax Act, 1961 was brought in by the Parliament. After introduction of this section, "any person, who pay on or after 1st June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or ....
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....Act. The learned AR, relying on Board Circular No. 5/12 dated 29/02/2016 contended that the assessee's relationship with that of the doctors is on a principal to principal basis and provision of section 194H does not have application. 7.1 The Ld. DR present strongly supported the orders of the Income Tax authorities. 8. I have heard the rival contentions and perused the material on record. Section 194H was introduced by Finance Act (No. 2), 1991 with effect from 01/10/1991. The object and extent of the new provision was explained by the Board in its Circular No. 621 dated 19/12/1991 (1992) 195 ITR Statute 154). The relevant portion of the Board Circular No. 621 dated 19/12/1991 reads as follows: "Insertion of a provision for ....
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....ayments made by the assessee to the doctors are taxable in the hands of the doctors. The payments are actually in the form of secret commission and the assessee as well as the doctors who received it never wanted this information to be revealed to the Income Tax Department or to the general public. Had the assessee effected TDS on these payments, the doctors would have been compelled to disclose this income in their returns of income. The assessee by not deducting tax at source, had aided the doctors to evade income tax which was due to the Central Government. 8.2 The explanation of term 'Commission' or 'brokerage' in section 194H of the I.T. Act is an inclusive definition. An inclusive definition only seeks to specifically include the m....