TaxTMI 
TaxTMI 
2023 (7) TMI 647
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.... generalizing the terms and conditions of MOU entered by M/s Bigtree with different persons, for different activities undertaken by it, in a different situation and a different circumstance. The Assessing Officer has no authority to dictate the terms and conditions of MOU entered by the Appellant, which is none of her business. And also amounts to stepping into the shoes of the Appellant. 3. On the facts and circumstances of the case, the Assessing Officer in assuming the constructive payment of commission by the Appellant to M/s Bigtree as against the fact that the Appellant has not paid any commission to M/s Bigtree, whereas, M/s Bigtree has shared its income to the Appellant for granting permission to upload the seat layout of the appellant cinema theatre in M/s Bigtree website. 4. On the facts and circumstances of the case and under the provisions of the law, the Assessing Officer erred in passing the order u/s 201(1) and 201(1A) of the Income Tax Act, 1961 though section 194H of the Income Tax Act, 1961 is not applicable to the Appellant as the Appellant has not paid any commission on actual payment mode or constructive payment ñiode. 5. On th....
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....res engaged in the business of exhibition of films. A survey u/s. 133A was conducted in the business premises of M/s Bigtree. M/s Bigtree provides services through their online platform Book.My.Show, facilitating booking for cinema tickets to the public by providing online ticketing platform for end customers and sale of tickets of cinemas, food and beverages coupons, and events through its website www.bookmyshow.com. The copies of agreements were examined by the authorities below. In the case of cinema owners, when the end customers books cinema tickets through bookmyshow portal and makes the payment to M/s Bigtree, the payment is raised towards ticket cost along with convenience fees that is charged over and above the ticket charges. The ticket cost is remitted by M/s. Bigtree to the cinema owners after deducting TDS while it retains convenience fee which is revenue in the hands of M/s. Bigtree. The Ld.AO was of the opinion that the convenience fee retained by M/s. Bigtree was in lieu of commission service charges payable by the cinema owners (assessee) and amounts to constructive payment made by the cinema owners(assessee) to M/s. Bigtree. He therefore, was of the opinion that t....
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.... factual position which emerges, it is clear that the said convenience fees are nothing but charges for use of the ticket booking platform of BEPL which has been used by the appellant. BEPL is being paid this amount of convenience charges on the basis of the tickets sold through it's platform. The nature of these convenience charges is clearly of the nature of commission/service charges. The said amount of convenience retained by BEPL out of the total amount received by the end users amounts to constructive payment of commission. The contention of the appellant that BERL has shared it's income for allowing it to upload the seat layout of the appellant cinema theatre in Bigtree website platform, is not acceptable since if that was the case, BEPL would have made TDS on the payments made to the appellant for allowing it to upload the seat layout of the appellant cinema theatre." Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. During the course of hearing the ld.AR has raised legal issue in Ground No.6 in the appeal filed for assessment year 2013-14, stating that, the order passed by the Ld.AO is barred by limitation, and theref....
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....2019. Hence the order passed by the Assessing Officer for the financial year 2012-13 relevant to the assessment year 2013-14 is barred by limitation. The department before Hon'ble I.T.A.T, Bangalore Bench in ITA No.2931/Bang/2018 for the financial year 2010-11 relevant to the assessment year 2011-12 in the case of DCIT Bangalore Vs M/s Coffeeday Enterprises Ltd taken the stand that the limitation period u/s 201(3) of Income Tax Act for the financial year 2010-11 would apply only to a pay-out made to resident Indian, not to the non-resident Indian. It means the limitation period u/s 201(3) for the financial year 2012-13 is applicable as existed during the financial year 2012-13 prior to the amendment by the Finance Act 2014. 7. The Commissioner of Income Tax (Appeals), National faceless Appeal Centre, Delhi passed an order u/s 250 of the Income Tax Act, 1961 by dismissing the appeal of the Appellant without appreciating the contention of the Appellant on question of law and merits. The Commissioner of Income Tax (Appeals) has not even rebutted the judgements relied by the Appellant in support of his contention. In view of the above submission, the Appellant did....
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....tion (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of (i) two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed. (ii) six years from the end of the financial year in which payment is made or credit is given, in any other case Provided that such order for a financial year commencing on or before the 1st day of April, 2007 may be passed at any time on or before the 31st day of March, 2011. 10.4 The question whether the order passed u/s. 201(1) and 201(1A) of the Act for the assessment year 2011-12, was barred by limitation was decided against the assessee by the CIT(A), on the reason that it is observed from the provisions of section 201(3) that the time limit period of six years is applicable for the failure to deduct whole or any part of the tax from the person resident in India and in the appellant's case the deductee is not an Indian resident company and therefore the time limit period of six years prescribed u/s. 201(3) will not apply to the present case. In....
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....in a reasonable time and what is a reasonable time limit depends on the facts of that particular case. 10.7 The Hon'ble Delhi High Court in the case of CIT v. NHK Japan Broadcasting Corporation reported in [(2008) 305 ITR 137 (Delhi)] had held that the order passed u/s 201 of the I.T.Act beyond four years was not reasonable and had quashed the same as barred by limitation. Similar view was taken by the Hon'ble Himachal Pradesh High Court in the case of CIT v. Satluj Jal Vidyut Nigam Ltd. reported in [(2012) 345 ITR 552 (HP)]. As mentioned earlier, the learned DR submitted that the time limit prescribed in sub-section (3) of section 201 does not have application since the payee is a non-resident. The Hon'ble Bombay High Court in the case of Director of Income-tax (International Taxation) v. Mahindra & Mahindra Ltd. (supra) had held even if there is no time limit 41 ITA No.2931/Bang/2018 & C.O. No. 42/Bang/2019 prescribed under the statute for passing an order u/s 201(1) / 201(1A) of the I.T. Act, a reasonable time limit should be read into the provision. The Hon'ble Bombay High Court had confirmed the Special Bench order of the Tribunal, wherein the time limit prescribed fo....
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....2013-14 on the legal issue raised in Ground no.6. 7. Now coming to the merits of the case for assessment year 2014-15, the ld.AR reiterated the submission made before the lower authorities and he also submitted that there was no relationship between the principal and agent between these two parties, therefore, the provision of sec.194H is not applicable. The M/s. Bigtree directly receives service charges from the end customers and does not receive from the assessee. The M/s Bigtree company receives ticket charges and service charges separately after deducting the fee as per the agreement, remits the balance amount to the assessee. He submitted that the assessee company has got share from M/s. Bigtree and in support of which he submitted Form No.26AS. During the course of hearing the ld.AR has also raised legal issue regarding not passing order within the stipulated time limit, in this regard he reiterated the pages in appeal set , which is placed at page Nos.11 and 12. In this regard he relied on the judgment on the coordinate bench of Tribunal in the case of DCIT Vs. M/s Coffee Day Enterprises Ltd., in ITA No.2931/Bang/2018 for the assessment year 2011-12. 7.1. The ld.DR rel....
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..... ADIT reported in (2014) 45 taxmann.com 196 passed by Hon'ble Delhi Tribunal. The facts in the above case are distinguishable with that of the present assessee before us. The main issue that was considered by Hon'ble Delhi Tribunal was in respect of allowability of expenses incurred by the head office of Right Tunneling Company Ltd. which was located in Thailand for an Indian project. It is clear that from the mere perusal of the facts therein that the assessee therein had claimed certain expenditure incurred by it towards an Indian project which was disallowed by the Ld.AO on the ground that they are initial start-up expenses and has to be held as capital in nature. Another issue that was considered by Hon'ble Delhi Tribunal was in respect of disallowance u/s. 40(a)(i)(a) for non-compliance of section 195 on an expenditure claimed on account of machinery hire charges. The facts in respect of this issue was that the assessee therein had hired certain machinery and paid hire charges to Italian Thailand Development Co. Ltd. on which TDS was not deducted. 7.5. The Ld.CIT(A) relied on the decision of Hon'ble Supreme Court in case of M/s. JB Boda & Company Pvt. Ltd. vs. CBDT (supra)....
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.... that there is no non-compete clause wherein a complete /partial control of M/s. Bigtree by the assessee is not established. M/s. Bigtree on its online platform sells tickets of other / many theatre owners apart from the assessee before us. For example if the theatre has a total 200 seats, if in the event no tickets are sold by the Bigtree, there is no penalty that is levied on Bigtree. It is totally the discretion of the customers to use Bigtree for booking the tickets. The agreement of the assessee with M/s.Bigtree is a non exclusive agreement for selling cinema tickets of the assessee through its platform. The only income earned by the Bigtree is the convenience fee that it collects from the customers / movie viewers. Even there is no discounts given by the assessee to the Bigtree on account of tickets purchased by the customer from their platform. 7.9. The applicability of section 194H in the case of amount received by the M/s.Bigtree from its end customer depends on whether there is any payments that retained by the Bigtree as payable by the assessee. Even though the definition of the term "commission or brokerage" used in section 194H is in a inclusive definition, it is cl....
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....e agent. For the sake of reading, the relevant content of Section 194H of the Act for the Financial Year 2012-13, is reproduced as under: "Commission or brokerage 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 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 draft or by any other mode, whichever is earlier, deduct income tax thereon at the rate of "ten percent". Explanation: For the purposes of this Section: (i) "commission or brokerage" includes any payment received or receivable directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities" Upon perusal of submissions, the following importan....
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.... case of M/s. Right Tunnelling Co. Ltd vs. ADIT [TS-220-ITAT-2014] wherein it was held that adjusting expenditure payable against a receipt will not thwart applicability of section 195 and the mode of payment cannot affect liability under the Income-Tax Act, 1961. Document 4 Bigtree MEMORANDUM OF UNDERSTANDING AR 18/10/22 This MOU is entered into between Bigtree Entertainment Private Limited, having its office located at Gr. Floor, Wajeda House, Gulmohar Road Rd. 7. Juhu Scheme. Mumbai 400049 (hereinafter referred to as "Bigtree") and "Mr.Sridhar having its registered office at No.43/2,100 Feet Road, Next To Kamakya, Banashankari 3RD Stage, Bangalore-560085 (hereinafter referred to as ("Eshwari theatre"). In consideration of Mr.Shridhar having appointed Bigtree as a service provider in terms of this MOU, Bigtree hereby agrees and undertakes that it will sell tickets of Kamakya Cinema Theatre on its ticketing platform BookMyShow in the channels including but not limited to the following: (c) Sales through the internet to be facilitated through the websites owned or contrailed by Bigtree accessible through computers or WAP and GPRS enabled....