2020 (6) TMI 238 - AT - Income Tax

TDS u/s 194H - Commission paid to 6 parties w/o TDS deduction - Disallowance u/s 40(a)(ia) - contended on behalf of the assessee that the amount in question represented trade discount allowed by the assessee and since the same was not in the nature of commission as wrongly taken by the Assessing Officer, there was no requirement of deduction of TDS - HELD THAT - Assessee has raised a new contention in support of his case that the amount in question represented management fees payable by Vodafone to the concerned parties as distributor and the role of the assessee was only to facilitate the disbursement /reimbursement of the said amount towards management fees to the concerned distributors - also filed the additional evidence in the form of relevant e-mails received from Vodafone and submitted that the matter may be sent back to the Assessing Office for verifying the new plea raised on behalf of the assessee in the light of the said additional evidence. Alternatively he has also submitted that the concerned recipients having already declared the amount in question as their income and having paid tax thereon, the assessee, therefore, cannot be treated as in default for non-deduction of tax at source on the said amount and no disallowance under section 40(a)(ia) can be made Both these contentions raised by the ld. Counsel for the assessee for the first time before the Tribunal require verification and even the ld. D.R. has not raised any objection for sending the matter back to the Assessing Officer for deciding the same afresh after proper verification. - Appeal of the assessee is treated as allowed for statistical purposes.

Summary

Issues involved: Disallowance of commission under section 40(a)(ia) for non-deduction of tax at source.

Analysis:
1. Background: The appellant, an individual engaged in trading, filed an appeal against the disallowance of ?3,92,864 made by the Assessing Officer and upheld by the ld. CIT(Appeals) under section 40(a)(ia) of the Income Tax Act, 1961.

2. Assessing Officer's Findings: The Assessing Officer noted that the appellant received commission income from certain parties without deducting tax at source, leading to the disallowance under section 40(a)(ia) for non-compliance with section 194H provisions.

3. Arguments Before CIT(Appeals): The appellant contended that the amount in question was a trade discount, not commission, and therefore, tax deduction was not required. However, the ld. CIT(Appeals) rejected this argument, upholding the disallowance.

4. Tribunal's Decision: During the Tribunal proceedings, the appellant's counsel introduced new arguments, claiming the amount was management fees for Vodafone, and the appellant was a facilitator. Additional evidence in the form of emails was submitted. The Tribunal found these contentions meriting verification and set aside the CIT(Appeals) order, remanding the matter to the Assessing Officer for reassessment.

5. Conclusion: The Tribunal allowed the appeal for statistical purposes, directing a fresh assessment by the Assessing Officer based on the new contentions and evidence presented during the Tribunal proceedings.

This detailed analysis highlights the progression of events, arguments presented, and the Tribunal's decision to remand the case for further examination, ensuring a fair assessment based on the new evidence and contentions raised during the appeal.