ITO, New Delhi v. M/s. Ogaan Publication Pvt. Ltd., New Delhi

ITA 5050/DEL/2011 | 2008-2009
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 505020114 RSA 2011
Assessee PAN AAACO1078K
Bench Delhi
Appeal Number ITA 5050/DEL/2011
Duration Of Justice 4 month(s) 19 day(s)
Appellant ITO, New Delhi
Respondent M/s. Ogaan Publication Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-03-2012
Date Of Final Hearing 27-03-2012
Next Hearing Date 27-03-2012
Assessment Year 2008-2009
Appeal Filed On 11-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO.5050/DEL/2011 ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER WARD 13 (4) NEW DELHI. VS. M/S OGAAN PUBLICATION PVT. LD. H-2 HAUZ KHAS VILLAGE NEW DELHI 110 016. PAN : AAACO1078K (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI R.S. NEGI SR.DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT. IT IS DIRE CTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 29 TH JULY 2011 FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE COMMISSION PAID BY THE AS SESSEE CO. AMOUNTING TO RS.18436982/- TO ADVERTISEMENT AGENCIES FOR ADVERTISEMENTS CANVASSED BY THEM DOES NOT ATTRACT THE PROVISIONS OF SECTION 194H OF THE ACT WHICH PROVIDES F OR DEDUCTION OF TAX AT SOURCE ON PAYMENT OF COMMISSION OF BROKERAGE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. C IT (A) HAS ERRED IN HOLDING THAT THE COMMISSION PAID BY THE AS SESSEE TO ADVERTISEMENT AGENCIES FOR ADVERTISEMENTS CANVASSED B Y THEM WAS NOT IN THE NATURE OF COMMISSION BUT WAS IN THE NATURE OF DISCOUNT WHEN THE ADVERTISEMENT AGENCY IS IN FACT WOR KING FOR THE ASSESSEE BY PROVIDING THEM ADS FOR THE SPACE FOR W HICH THEY ARE BEING PAID AND ARE COVERED BY THE PROVISION OF S ECTION 194H ITA NO.5050/DEL/2011 2 OF THE ACT WHICH PROVIDES FOR DEDUCTION OF TAX AT SOURCE ON PAYMENTS OF COMMISSION OR BROKERAGE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. C IT (A) HAS ERRED IN HOLDING /- TO ADVERTISEMENT AGENCIES FOR ADVERTISEMENTS CANVASSED BY THEM WAS NOT IN THE NATURE OF COMMISSION WHEN THERE IS A CLEAR CUT RELATIONSHIP OF P RINCIPAL- AGENT BETWEEN THE ASSESSEE CO. AND THE AGENCY AND THE CA SE IS SQUARELY COVERED BY THE DECISIONS OF CIT VS. DIRECTOR S PRASAR BHARTI 325 ITR 205 (KER) 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. C IT (A) HAS FAILED TO APPRECIATE THE FACTS DISCUSSED IN DETAIL I N THE ASSESSMENT ORDER AND REMAND REPORT. 5. THE APPELLANT CRAVES TO BE ALLOWED TO ADD DELETE OR AMEND ANY OTHER GROUNDS OF APPEAL. 2. AN ADDITION OF RS.1 84 36 982/- WAS MADE IN RESPECT OF AGENCY COMMISSION U/S 40(A)(IA). ACCORDING TO THE DEPARTMENT THE ASSESSEE WAS LIABLE FOR DEDUCTION OF TAX ON THESE PAYMENTS UNDE R THE PROVISIONS OF SECTION 190H AND FOR NON-DEDUCTION OF TAX AFORE MENTIONED ADDITION WAS MADE U/S 40(A)(IA). LD. CIT (A) HAS DELETED THIS A DDITION FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF IN RESPECT OF ASSESSMENT YEAR 2006-07 AND 2007-08 DATED 31 ST MAY 2011 IN ITA NOS.1990/DEL/2010 FOR A.Y. 2006-07 AND 3741/DEL/2011 FOR A.Y. 2007- 08. AS THE ISSUE INVOLVED WAS SAME AND FACTS AND CIRCUMST ANCES WERE SAME LD. CIT (A) HAS DELETED THE ADDITION. 3. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND IT WAS FOUND THAT THIS VERY ISSUE IS IDENTICAL TO THE ISSUE RAISED BY T HE DEPARTMENT IN RESPECT OF ASSESSMENT YEAR 2006-07 AND 2007-08 AND CIT ( A) HAD DELETED THE ADDITION AND THE ORDER OF CIT (A) WAS CO NFIRMED BY THE TRIBUNAL VIDE THE AFOREMENTIONED ORDER DATED 31 ST MAY 2011 FOLLOWING WHICH LD. CIT (A) HAS DELETED THE ADDITION. FOR THE SAKE OF COMPLETENESS THE CONCLUDING PORTION OF THE AFOREMENTI ONED ORDER OF THE TRIBUNAL IN RESPECT OF A.Y. 2006-07 AND 2007-08 IS REPRODUCED BELOW:- ITA NO.5050/DEL/2011 3 29. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. 30. FOR DECIDING THAT WHETHER THE AMOUNT DESCRIBED BY THE ASSESSEE AS AGENCY COMMISSION IN THE INVOICES IS I N THE NATURE OF AGENCY COMMISSION OR IN THE NATURE OF DISCOU NT IT WILL BE RELEVANT TO DESCRIBE THE CONTENTS OF THE INVOICES ISSU ED BY THE ASSESSEE. 31. AS DISCUSSED ABOVE THERE ARE TWO TYPES OF TRANSACTIO NS ONE RELATES TO INVOICE ISSUED BY THE ASSESSEE TO THE ADVERTIS ER ITSELF (FOR SHORT TRANSACTION TYPE A) AND OTHER TYPE OF TRANSACTIO N IS WHEN SPACE IS PURCHASED BY THE ADVERTISING AGENCY ON BEHALF OF ITS CLIENT (FOR SHORT TRANSACTION B). 32. FIRSTLY THE REFERENCE IS MADE TO THE TRANSACTION TYPE A. COPY OF SUCH INVOICE IS PLACED AT PAGE 62 OF THE PAPE R BOOK. THIS IS AN INVOICE DATED 1.12.2005 NO. AD/622/2005-0 6 ISSUED TO MOON RIVER (M.G. INDS.) DATED 16 TH SEPTEMBER 2005. CLIENT NAME IS ALSO DESCRIBED AS MOON RIVER (M.G. INDS.). SIZE IS MENTIONED AS FPC. ISSUE IS MENTIONED AS DECEMBER DECEMBER 2005 AND THE REST OF THE DESCRIPTION IS AS UN DER: - GROSS AMOUNT RS. 1 50 000.00 LESS VOLUME DISCOUNT RS. 75 000.00 LESS AGENCY COMMISSION RS. 11 250.00 NET AMOUNT RS. 63 750.00 DUE DATE: 28/02/2006 SIXTY THREE THOUSAND SEVEN HUNDRED FIFTY RUPEES AND Z ERO PAISE ONLY. 33. FOR INVOICE RELATING TO ADVERTISING AGENCY (TYPE B TRANSACTION) REFERENCE CAN BE MADE TO COPY OF INVOICE PLACED AT PAGE 68 OF THE PAPER BOOK WHICH IS DATED 1.1.2006 NO. IS AD/680/2005-06 ISSUED IN THE NAME OF PAR-4 ADVTG. PVT. LTD. CLIENT NAME IS WRITTEN AS DS DAMAS SIZE IS MENTIONED A S FPC. ISSUE IS MENTIONED AS JANUARY JANUARY 2006 AND RE ST OF THE ENTRIES ARE AS UNDER: - GROSS AMOUNT RS. 1 50 000.00 LESS VOLUME DISCOUNT RS. 75 000.00 LESS AGENCY COMMISSION RS. 11 250.00 NET AMOUNT RS. 63 750.00 DUE DATE : 31/03/2006 SIXTY THREE THOUSAND SEVEN HUNDRED FIFTY RUPEES AND P AISE ZERO ONLY. ITA NO.5050/DEL/2011 4 34. FROM INVOICE RELATING TO ADVERTISER (TYPE A) IT CAN BE SEEN THAT AGAINST THE GROSS AMOUNT OF RS. 1 50 000/- THE ASSES SEE HAS CHARGED 63 750/- BY GIVING THE VOLUME DISCOUNT AS WEL L AS AGENCY COMMISSION AND A NET AMOUNT OF RS. 63 750/- HA S BEEN REALIZED. SIMILARLY IN TYPE B TRANSACTION ALSO THE AS SESSEE HAS REALIZED A SUM OF RS. 63 750/-. 35. THE PERUSAL OF BOTH THE ABOVE MENTIONED TRANSACTIONS WILL REVEAL THAT ASSESSEE IS GIVING DISCOUNT WITH RESPECT TO V OLUME AS WELL AS AGENCY COMMISSION IRRESPECTIVE OF THE FACT THAT WHETHER THE ADVERTISEMENT IS BOOKED BY THE ADVERTISER ITSELF OR TH ROUGH ADVERTISING AGENCY. THE ASSESSEE DID NOT COLLECT GROS S AMOUNT AND FROM GROSS AMOUNT ITSELF STRAIGHTWAY DEDUCTION HAS B EEN GRANTED TO THE PERSON WHO HAS BOOKED THE ADVERTISEMENT ON ACCOUNT OF VOLUME DISCOUNT AS WELL AS AGENCY COMMISSI ON. IT MAY BE SEEN THAT IN THE CASE OF MOON RIVER (M.G. INDS. ) THE ADVERTISEMENT HAS NOT BEEN BOOKED BY ADVERTISING AGENCY EVEN THEN AMOUNT OF RS. 11 250/- HAS BEEN REDUCED ON ACCOU NT OF AGENCY COMMISSION. THEREFORE IT WILL CLEARLY DEMON STRATE THAT ASSESSEE IS CONCERNED ONLY WITH THE AMOUNT TO BE REALIZ ED FINALLY WHICH IS THE SAME IN BOTH TYPE OF TRANSACTIONS. THEREFORE THE NATURE OF AMOUNT AGENCY COMMISSION IS ONLY A DISCO UNT THOUGH IT HAS BEEN DESCRIBED AS AGENCY COMMISSION. BOTH THE TRANSACTIONS ARE ON PRINCIPAL TO PRINCIPAL BASIS. THE CASE LAW RELIED UPON BY THE ASSESSEE BEFORE CIT(A) AND BEFORE US SUPPORTS THE CASE OF THE ASSESSEE. THEREFORE WE ARE OF THE OPINION THAT LD. CIT(A) IS RIGHT IN HOLDING THAT DISALLO WANCE COULD NOT BE MADE AS ASSESSEE WAS NOT UNDER AN OBLIGATION TO DEDUCT TAX U/S 194H. WE DECLINE TO INTERFERE. THIS GROUND O F THE REVENUE FOR BOTH THE YEARS IS DISMISSED. 36. IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 4. IN THIS VIEW OF THE SITUATION WE DISMISS THE APPEAL FILED BY THE REVENUE. 5. IN THE RESULT THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.03.20 12. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 30.03.2012. ITA NO.5050/DEL/2011 5 DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES