9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 990 - AT - Income TaxTDS u/s 195 - deduction of TDS on payment of commission - Held that - But in the present case the applicability of section 195(2) would only arise in case the assessee is doubtful or is not sure as to what should be the portion so taxable or the amount of tax to be deducted and in case where a person responsible for deduction is fairly certain then in that eventuality he can make his own determination as to whether the tax was deductible at source and if so, what should be the amount thereof. Considering the facts of the present case the applicability of section 195(2)of the I.T. Act is not made out. Therefore, there was no requirement for the assessee to make application to the AO for non deduction of TDS. Since all those facts have already been considered by CIT(A) while passing impugned order. No new circumstances have been brought on record before us in order to controvert or rebut the findings recorded by the learned CIT (A). Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the Revenue stands dismissed. Addition u/s 41(1) - Held that - CIT(A) has taken into consideration that a substantial portion of the outstanding amount was out of provision made for A.Y. 2004-05 under consideration, and therefore the ld. CIT(A) has rightly held that the AO s contention that the whole commission was outstanding for last so many years was not correct. Ld. CIT(A) has also considered that the said commission payable by assessee was not been waived or unilaterally written off by the receiver of commission and also the payment of said amount was not time barred in relevant assessment year. Considering all the facts and legal propositions, the CIT(A) has rightly come to the conclusion that the non submission of reply to the same cannot be enough to construe that no services might have been rendered by the assessee and hence the treatment of said liability as non-genuine was not fully substantiated in the assessment order and hence the additions of this ground was rightly deleted by CIT(A). No new circumstance has been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A) on the basis of the remand report. Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the Revenue stands dismissed.
Issues Involved:
1. Deletion of addition under Section 40(a)(ia) for non-deduction of TDS on payment of commission. 2. Reliance on the Supreme Court decision in GE India Technology Centre Pvt. Ltd. vs. CIT. 3. Deletion of addition under Section 41(1) for cessation of liability. 4. Request to quash the CIT(A) order and restore the AO's order. 5. Amendment or alteration of grounds. Issue-wise Detailed Analysis: 1. Deletion of Addition under Section 40(a)(ia) for Non-deduction of TDS on Payment of Commission: The Revenue contended that the CIT(A) erred in deleting the addition of ?1,46,19,772 under Section 40(a)(ia) because the assessee neither deducted TDS on the commission payment nor applied to the AO for non-deduction of TDS. The CIT(A) relied on the Supreme Court's decision in GE India Technology Centre Pvt. Ltd. vs. CIT, which clarified that tax is required to be deducted at source only when the sum payable to the non-resident is chargeable to tax in India. The CIT(A) found that the assessee's belief that no tax was required to be deducted on the commission paid to the non-resident was justified based on CBDT Circular No. 786 and the fact that the non-resident operated outside India. The Tribunal upheld the CIT(A)'s findings, noting that the AO had not examined the deductibility of tax on such payments on merits and had invoked Section 195(1) merely because the assessee did not apply under Section 195(2). The Tribunal found no reason to deviate from the CIT(A)'s well-reasoned and judicious findings and dismissed this ground raised by the Revenue. 2. Reliance on the Supreme Court Decision in GE India Technology Centre Pvt. Ltd. vs. CIT: The Revenue argued that the CIT(A) erred in relying on the Supreme Court's decision in GE India Technology Centre Pvt. Ltd. vs. CIT, as the facts of that case were different. The Tribunal, however, agreed with the CIT(A) that the Supreme Court's decision was relevant and applicable. The Supreme Court had clarified that the payer is bound to deduct tax at source only if the sum paid is assessable in India, and Section 195(2) applies only when there is doubt about the taxability of the payment. Since the assessee was certain that no tax was deductible on the commission paid to the non-resident, there was no requirement to apply under Section 195(2). The Tribunal upheld the CIT(A)'s reliance on the Supreme Court's decision and dismissed this ground raised by the Revenue. 3. Deletion of Addition under Section 41(1) for Cessation of Liability: The Revenue contended that the CIT(A) erred in deleting the addition of ?2,06,93,996 under Section 41(1) for cessation of liability, arguing that the assessee failed to prove the genuineness of the liability during the assessment proceedings. The CIT(A) found that a substantial portion of the outstanding amount was from the provision made for the relevant financial year, and the AO's contention that the entire commission was outstanding for many years was incorrect. The CIT(A) also noted that the commission payable was not waived or written off by the receiver and was not time-barred. The Tribunal agreed with the CIT(A) that the AO had not brought sufficient facts to treat the liability as non-genuine and that non-submission of a reply by the assessee was not enough to conclude that no services were rendered. The Tribunal upheld the CIT(A)'s well-reasoned and judicious findings and dismissed this ground raised by the Revenue. 4. Request to Quash the CIT(A) Order and Restore the AO's Order: The Revenue requested to quash the CIT(A) order and restore the AO's order. However, the Tribunal found no new circumstances or reasons to deviate from the CIT(A)'s findings, which were based on a thorough analysis of the facts and legal propositions. The Tribunal upheld the CIT(A)'s order and dismissed this ground raised by the Revenue. 5. Amendment or Alteration of Grounds: The Revenue sought leave to amend or alter any ground or add a new ground if necessary. However, the Tribunal found no specific adjudication required for this request as it was general in nature. Conclusion: The Tribunal dismissed the appeal filed by the Revenue, upholding the CIT(A)'s order in favor of the assessee. The Tribunal found the CIT(A)'s findings to be judicious, well-reasoned, and based on a thorough analysis of the facts and legal propositions. The Tribunal pronounced the order in the open court on 10-08-2016.
|
