TaxTMI 
TaxTMI 
TaxTMI 
2022 (3) TMI 1434
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....learned CIT(A) erred in not adjudicating the reliance placed by the Appellant on the decision of Supreme Court laid down in the case of G.E. India Technology Cen. (P.) Ltd. (193 Taxman 234) which held that the provisions relating to Tax Deducted at Source applies only to those sums which are "chargeable to tax" under the Income-tax Act, 1961. 1.2 On the facts and circumstances of the case and in law, the learned CIT(A) has factually erred in claiming that the Assessing Officer considered the payments to Facebook taxable under Section 9 of the Act without acknowledging the fact that the Assessing Officer did not actually determine the taxability of payments and held that all payments to non-residents are liable to withholding of taxes under Section 195 of the Act. 2. Ground 2- Erred in concluding that the payments made to Facebook, Ireland ('Facebook') towards banner advertisement expenses amounting to INR 10,46,35,355 are in the nature of Fees for Technical Services ('FTS') which are rendered in India and hence within the meaning of Section 9(1)(vii) of the Act and thereby, erred in disallowing the aforesaid sum in view of the provision of Section 40(a)(ia) of the Act. 2.1 On....
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....and material on its portal, so that any person vising the Appellant's website and/or looking for website address of the Appellant could visit the Facebook portal and thereby visit Appellant's website by clicking on Facebook.com. The learned CIT(A) has failed to appreciate that the payments made to Facebook were merely for the purpose of displaying of banner advertisement on Facebook web page and Facebook did not act as an intermediary for exiting customers and clients to visit the Appellant's website. 2.6 On the facts and circumstances of the case, the learned CIT(A) has factually erred in holding that the Appellant has not provided any document / information to prove that Facebook, Ireland has provided the services without acknowledging the fact that the Appellant provided Community Payments Terms to substantiate that the payments for advertisement expenses were to Facebook, Ireland were made under the said agreement. 2.7 On the facts and circumstances of the case, the learned CIT(A) has factually erred in stating that the Appellant has been unable to substantiate that Appellant does not have any contract with Facebook Inc, USA, without verifying the role of Facebook Inc. mere....
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....f FTS under Section 9(1)(vii) of the Act, without appreciating the fact that FTS covers under its ambit rendition of only those managerial, technical or consultancy that requires human element/intervention, as held by Supreme Court in the case of Bharti Cellular and that, the learned CIT(A) has failed to conduct appropriate enquiries and verification to conclude the involvement of human element while displaying and advertising of the Appellant. 2.13 On the facts and circumstances of the case and in law, the learned CIT(A) has legally erred in not considering submission of the Appellant, regarding absence of human intervention on part of Facebook, Ireland in order to display / provide banner advertisement on its webpage. 2.14 On the facts and circumstances of the case, the learned CIT(A)has legally erred in stating that all the cases cited by the Appellant discussed whether advertisement charges constituted Royalty or not and not whether these payments constitute FTS without appreciating the fact that such judicial precedents have also discussed the taxability under Section 9(1)(vii) of the Act for payments toward advertisements expenses. The learned CIT(A) has further failed to....
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....n by the assessee during the assessment proceedings, the Assessing Officer made disallowance of Rs.10,46,35,355/- on account of non-deduction of TDS u/s 40(a)(ia) of the Act. The Assessing Officer further made disallowance of expenses related to travelling and conveyance as well as miscellaneous expenses towards Rs.24,20,753/- and Rs.18,24,506/-. The assessment was completed on 29.12.2017. The Assessing Officer vide order under Section 154 dated 29.03.2019 passed rectification thereby holding that the Section quoted by the Assessing Officer as 40(a)(ia) of the I.T. Act in the assessment order dated 29.12.2017 for the said disallowance be read as Section 40(A)(i) of the I. T. Act, 1961. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee thereby sustaining the addition related to disallowance u/s 40(a)(ia). 5. The Ld. AR submitted that the assessee has not rendered any technical services from the company Facebook. In fact, the payments made to the Facebook cannot come under the purview of Section 9 of the Act as all the payments to non-resident are not liable to withhold taxes u/s 195 of the ....
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....le to tax in India and there is no element of technical services involved in the present assessee's case. The Fees for Technical Services covers under its ambit only those managerial, technical or consultancy that requires human intervention as held by the Hon'ble Supreme Court in the case of Bharati Cellular. There is no human intervention on the part of Facebook, Ireland regarding the banner advertisement on its web page. As per rectification order under Section 154 dated 29.03.2019 passed by Assistant Commissioner of Income Tax-13(1)(2), the Department/Revenue has rectified the original order dated 29.12.2017. The Assessing Officer rectified Section quoted at Sr. No. (iii) of para 4.3 made the disallowance of Rs.10,46,35,355/- on account of non-deduction of TDS u/s 40(a)(i) of the Act. 6. The Ld. DR submitted that the cross-objection should be allowed and the delay should be condoned as during the proceedings, the Revenue has rectified its original order and corrected the mistake of giving proper section i.e. 40(a)(i) of the Act which deals with royalty and deduction to that extent. The Ld. DR relied upon the assessment order and the order of the Ld. CIT(A) as well. 7. We have....
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....e Assessing Officer. The Assessing Officer has proceeded on the basis that as per the provisions of Section 195 of the Act any amount paid to non-resident will attract this provision and the assessee is liable to make TDS except as provided under Section 195(2) or under Section 197 where such deductee obtain nil deduction certificate from the Assessing Officer and furnish the same to the deductor before receiving the credit of such amount. In the present case, the relevant sub-section 2 to Section 195 has specifically stated that a person responsible for deducting any such sum chargeable under this Act who is a non-resident considers that the whole sum would not be income chargeable in the case of recipient the said person "may make an application" in such form and manner to the Assessing Officer to determine in such a manner as may be a prescribed. The said application though in the present case has not been made by the assessee cannot be treated as a mandate because the Section clearly states that such person "may make an application" as may be prescribed. In the present case, the assessee was very well aware that Facebook, Ireland is a non-resident and the advertisement payment ....