TaxTMI 
TaxTMI 
2022 (6) TMI 117
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....18, Ahmedabad; respectively; under s. 250 of the Income Tax Act, 1961 (the Act) concerning AYs. 2011-12 to 2013-14 wherein learned CIT(A) granted relief to the assessee. Learned CIT(A) observed that expenditure of regional conference and scientific conferences have two parts i.e. for participation and for reimbursement of expenses are liable to deduction of tax under s. 194H of the Act. 2. At the outset, learned AR filed a judgment of Hon'ble Jurisdictional High Court in assessee's own case and titled as CIT(TDS) vs. Intas Pharmaceuticals Ltd. R/Tax Appeal Nos. 172 to 177 of 2021 order dated 11.08.2021, wherein, in similar facts and circumstances, relief was granted by the Hon'ble Gujarat High Court to the assessee with follo....
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....- tickets, cost of souvenir and cost of registration for the conference for doctors, etc., and certain facilities provided to the doctors were in lieu of the business provided by them. These expenses were claimed by the assessee under various heads as its own expenses and no TDS was deducted on the same. The Assessing Officer took cognizance of the Notification issued by the Indian Medical Counsel dated 10.12.2009, which barred medical practitioners from taking gifts, travel facilities, hospitality, cash and monitory grants from any pharmaceutical industry and observed that the assessee had incurred the expenditure on the doctors for various conferences/workshops/camps etc., for which no TDS was deducted under Section 194H of the said Act. ....
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....n 260A of the said Act. 5. The appellant in all the appeals has proposed the following substantial questions of law in the memorandum of the appeal:- (A) "Whether the Appellate Tribunal has erred in law and on facts in holding that the expenditure incurred on doctors cannot be classified as commission and therefore, section 194H of the Act does not apply? (B) Whether the Appellate Tribunal has erred in law and on facts in holding there is no element of agency despite the fact that documentary evidences establishing agency were found during the course of survey? (C) Whether the Appellate Tribunal has erred in law and on facts in holding that doctors were not bound to prescribe the medicines as suggested by....
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....llow the findings of facts recorded by the assessing officer and the CIT (Appeals), who had treated the expenditure incurred on the doctors as "commission", and had accordingly made the respondent assessee liable to deduct the TDS under Section 194H of the said Act. 8. In order to appreciate the submissions of the learned Sr. Counsel Mr. Bhatt, it would be beneficial to reproduce the relevant provision contained in Section 194H of the Act:- "194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of 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 ....
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....ordingly." 9. From the bare reading of the said section, it clearly transpires that the assessee, who is not an individual or HUF, and who is responsible for paying to a resident, any income by way of commission or brokerage, has to deduct income tax 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 issuance of cheque or demand draft or by any other mode, at the rate of 5% (at the relevant time, it was 10%). As per the relevant part of the Explanation contained in Section 194H, "commission or brokerage would include any payment received or receivable directly or indirectly by a person acting on behalf of another person for services rendered not being "Profess....
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...., the payment received or receivable directly or indirectly has to be by a person acting on behalf of the assessee for the services rendered, not being professional services or for the services in the course of buying or selling of goods or in relation to any transaction relating to any assets, valuable articles or thing. Therefore, to fall within the explanation to Section 194H, the commission payment must have been received by a person who is acting on behalf of the assessee. As rightly observed by the Tribunal, the doctors were not bound to prescribe the medicines as suggested by the assessee. As such there was no legal compulsion on the part of the doctors to prescribe a particular medicine suggested by the assessee, and therefore, the ....