TaxTMI 
TaxTMI 
2017 (10) TMI 539
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.... of Rs. 33,86,68,406/- (i) The Ld. CIT(A) erred in facts and law in upholding the disallowance of Rs. 33,86,68,406/- u/s 40(a)(ia) of the Act for non-deduction of tax. The reasons given by him for doing so are wrong, contrary to the facts of the case and against the provision of law. (ii) The Ld. CIT(A) ought to have appreciated that Rs. 33,86,68,406/- is discount allowed in the invoice to the distributor or dealer for early payment and hence not liable to TDS. (iii) The Ld. CIT(A) failed to appreciate that the relationship between the appellant and distributor or dealer is on principal to principal basis and the distributor or dealer does not render any service to the appellant but invests at discounted price and recovers face value and earns profit as opportunity cost of money." In A.Y. 2012-13 the figure of Rs. 33,86,68,406/- be read as Rs. 50,52,75,132/-. 3. The Revenue in its appeal being ITA Nos. 3691 & 3692/Mum/2017 has taken ground 2, 3, 4, 5 and 6 to be the common ground being grounds A, B, C, D & E in A.Y. 2012-13 while ground No. 1 taken in A.Y. 2011-12 is not taken in A.Y. 2012-13. Both the parties agreed that whatever view the Tribunal ....
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....s. 40(a)(ia) rws 194J in respect of 'CAS, Middleware and SMS charges' whereas the jurisdictional ITAT, Mumbai 'L' Bench, in its order dated 28.03.2014 in the case of ADIT-(IT)-2(2), Mumbai Vs. Viacom 18 Media Pvt. Ltd. has confirmed that the payments made for use/right to use of 'process' are 'royalty' in terms of the Income-tax Act, 1961. 6) Whether on the facts, in the circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the disallowance u/s. 40(a)(ia) without appreciating the Hon'ble Kerala High Court in its judgment dated 20.07.2015 in the case of CIT-1, Kochi Vs. PVS Memorial Hospital Ltd. [2015] 60 taxmann.com 69 (Kerala) has decided the issue in favour of the Department." ITA Nos. 3061 & 3062/Mum/2017 4. The only issue involved in assessee's appeals relates to the sustenance of disallowance under section 40(a)(i) for non deduction of tax. 5. The brief facts of the case are that the AO noted that the assessee has paid commission charges amounting to Rs. 33,86,68,406/- under section 40(a)(ia) and the assessee has not deducted TDS under section 194H of the Income Tax Act. The AO, therefore, after giving ....
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....f the total value of the talk time cards. It is submitted by referring to page 129 of the paper book that this represent the discount given in the topup which entitles the person for talk time for a certain time. It was further contended that it is in fact a buying scheme under which the talk time cards are sold to the distributor at a discount and the distributor sells it to the retailers and the retailers sells it to the customers. 7. The learned D.R., on the other hand, vehemently contended that the assessee has not submitted the agreement between the distributor and the assessee as well as the sample subscription form neither before the AO nor before the CIT(A). Accepting the document at the level of the Tribunal will prejudice the Revenue. 8. We have gone through the copy of the agreement entered into by the assessee with the distributor available on pages 138 to 148 as well as the sample subscription application form available on pages 149 to 150 of the paper book. On the basis of the document and the issue involved we are of the view that examination of these documents as a whole along with the terms and conditions of the agreement entered into between the assessee and....
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....invest Ltd. vs. CIT 378 ITR 33 (Del) took the view that provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of the case as no exempt income was received or receivable during the relevant previous year by the assessee. Similar view has been taken by the Hon'ble Allahabad High Court in the case of CIT vs. Shivam Motors (P) Ltd. 272 CTR 277 and that of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Winsome Textile Industries Ltd. 319 ITR 204. 12. The learned D.R., even though vehemently relied on the orders of the authorities below but has not brought to our knowledge any contrary decision. We, therefore, dismiss ground No. 1 taken by the Revenue in A.Y. 2011-12. 13. Ground Nos. 2 to 6 in A.Y. 2011-12 and grounds A to E in A.Y. 2012-13 in Revenue's appeal relate to the deletion of disallowance under section 40(a)(ia) rw.s. 194J in respect of expenses on customer support services or disallowance under section 40(a)(ia) r.w.s. 194J in respect of CAS, Middleware and SMS charges. 14. The brief facts relating to this issue are that the AO noted that the assessee has deducted TDS in respect of expenditure on customer support servic....
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.... case of CIT vs. S.K. Tekriwal 361 ITR 432 vide order dated 3rd December, 2014 taken a view by which the Hon'ble High Court dismissed the appeal of the Revenue against the order of the Tribunal by holding that where tax was deducted by the assessee, though under a bona fide wrong impression under wrong provisions, the provisions of Section 40(a)(ia) could not be invoked and if there was any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various tax deduction at source provisions, the assessee could be declared to be an assessee in default under section 201 but no disallowance could be made invoking the provisions of Section 40(a)(ia). The said decision of the Hon'ble Calcutta High Court has not been referred to before the Hon'ble Kerala High Court and the Kerala High Court, therefore, did not consider the decision of the Calcutta High Court. This Tribunal in the case of CIT vs. Shri Zubin J. Gandevia in ITA No. 3357/Mum/2014 vide order dated 1st February, 2016 had the occasion to consider the binding nature of both the decisions and ultimately under para 8 of its order held as under: - "8. Bef....