2018 (11) TMI 1717

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.... deeming Bank guarantee commission incurred as Commission u/s 194H of the Act and disallowing it u/s 40[a][ia] of the Act for non-deduction of TDS by ignoring the appellate decisions and misinterpreting CBDT Circulars on the matter. 2. That 'Bank guarantee commission' is not 'Commission' as per the meaning of the term "Commission or Brokerage" as per Explanation (i) to Section Sect 194 H 3. The learned CIT(A) has erred in confirming the disallowance of Rsl09.88 lacs on Corporate Social Responsibility(CSR for Short) by AO, the CSR expenses incurred under the directions of BPE Govt, of India requiring Companies to spend a prescribed percentage of its profits on CSR -and now also made mandatory under the Companies Act." 3. At the very ....

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....guarantee commission. It was further held that although it is termed as guarantee commission, it is not in the nature of commission- as is understood in the common business parlance and in context of section 194F of the Act. Respectfully following the order of the Coordinate Benches, we hold that since principal-agent relationship is a sine qua non for invoking provisions of section 194H, the Ld. Commissioner of Income Tax (A) was not justified in upholding the disallowance u/s 4Q(a)(ia) in respect of bank guarantee commission. Accordingly, we allow ground nos. 1.1 and 1.2 of the assessee's appeal and order the deletion of this disallowance. 2. Coming to ground no. 2 of the assessee's appeal which challenges the expenses incurred towa....