2010 (5) TMI 682 - AT - Income Tax

Summary

Issues involved: Appeal against order u/s 143(3) for assessment year 2001-02 - Addition of advertising revenues - Deletion of interest charges u/s 234B and 234C.

Issue 1 - Addition of advertising revenues:
The appeal was filed by the Assessing Officer against the order of the CIT(A) directing to delete the addition made on account of advertising revenues received by SA5 BV for the assessment year 2001-02. The assessee contended that the advertisement revenue should not be taxed on an accrual basis. The Tribunal noted that the issue was already decided in favor of the assessee in a previous case. The Tribunal found no reason to interfere with the CIT(A)'s decision and dismissed Ground No. 1 accordingly.

Issue 2 - Deletion of interest charges u/s 234B and 234C:
The assessee raised a grievance against the deletion of interest charges under sections 234B and 234C by the CIT(A). The Assessing Officer had levied interest for non-deduction of tax at source by the assessee. However, the CIT(A) deleted the interest charges based on previous decisions. The Tribunal observed that it was the obligation of the person making payments to the non-resident assessee to deduct tax at source. Relying on various tribunal decisions and a Special Bench decision, the Tribunal upheld the CIT(A)'s decision to delete the interest charges. Ground No. 2 was also dismissed, and the appeal was ultimately dismissed.

This judgment highlights the importance of following established legal precedents and principles in tax assessments, especially regarding the taxation of income and the levy of interest charges under relevant sections of the Income-tax Act, 1961.