9911796707
TMI Blog2012 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per: A N Pahuja: This appeal filed on 20.07.2010 by the Revenue against an order dated 19.05.2010 of the CIT(A)-XIII, New Delhi, raises the following grounds:- 1. "On the facts and the circumstances of the case and in law, the order of CIT(A) is wrong, perverse, illegal and against the provisions of law which is liable to be set aside. 2. On the facts and the circumstances of the case and in law, the ld. CIT(A) has erred in deleting an addition of Rs.52,22,326/- ignoring the provisions of Section 40(a)(ia) of the Income tax Act, 1961 and the facts that the entire TDS amount has been claimed by assessee company. 3. On the facts and in circumstances of the case and in law, the learned CIT(A) has erred in deleting an addition of Rs.52,22,326/- without appreciating the fact that the commission received from M/s Amadeus India Pvt. Ltd. was rotated through the assessee company and intimately paid to the parties concerned and that the mischief of the provisions of section 194H and 40(a)(ia) of the Income-tax Act, 1961 are clearly attracted." 2. Facts, in brief, as per relevant orders are that return declaring loss of Rs.71,644/- filed on 20.11.2006 by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. duly deducted the tax on commission income paid to assessee at their end, which the assessee has claimed in its return. However, since the assessee did not deduct at source while making payment of commission to the travel agents, referring to provisions of sec. 40a(ia) of the Act, the AO disallowed the amount of Rs.52,22,326/-. 4. On appeal, the ld. CIT(A) deleted the addition holding as under:- "I have perused the various agreements referred and on consideration of the facts and arguments of the appellant I agree with the contentions of the appellant that the entire sum of Rs.65,71,690/- received by the appellant from Amadeus India Pvt. Ltd. was not in the nature of income but was received in a representative capacity for and on behalf of the various travel agencies who were part of the consortium agreement. The appellant has not rendered any service to Amadeus so as to construe the amounts received as income as the services were actually rendered by the constituent members, who alone are chargeable to tax on the same. Thus, I hold that the addition of Rs.52,22,326/- made by the Assessing Officer is not sustainable. The appellant succeeds on this ground of appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the lead member would collect the commission/fee and thereafter, distribute proportionately amongst the members. While referring to the relevant clauses of the agreement, the ld. AR further pointed out that since assessee was not conducting any business of a travel agency but acted as collecting agency on behalf of member travel agents and in passing on their share of income out of the money received from Amadeus on account of booking by the said travel agents, apparently, the payment made to members was not for any services rendered and thus, the assessee was not liable to deduct any tax at source for distributing the money received from Amadeus amongst constituent members. The said travel agents had shown the amount as their income and paid tax thereon. Inter alia, the ld. AR further pointed out that the principles of mutuality apply even in the case of a company and in this connection relied upon decision in FGP Ltd.v CIT, 326 ITR 444 (Bom.); Jit And Pal X-ray Pvt. Ltd. vs. CIT 267 ITR 370 (All); CIT Vs. U.PUP Upbhokta Sahkari Sangh Ltd.,288 ITR 106(All.) beside CIT Vs. Sirmor Truck Operator Union, 195 Taxman 62 (HP); Income Tax Officer Vs. Hall Properties Ltd. 2010-TIOL-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The travel agents agreed to proportionately contribute towards the expenditure of the assessee while the assessee was authorised to retain the money out of the revenues of the consortium travel agents collected from Amadeus. Inter alia, it was agreed that if the Amadeus India Pvt. Ltd. deducted Income tax at source in respect of payments made to the assessee in the representative capacity out of income of the consortium travel agents, then the credit for such tax deducted at source shall be claimed by the assessee alone in its return of income, and no other member would have any right or claim on such amount. In the event of any loss or damage on account of any breach in the stipulation of the agreement, all the members were jointly severally liable. In terms of the said agreement, the lead member i.e., the assessee is required to collect the commission for services rendered by other members and distribute the said commission amongst the members on priority basis. Though the TDS certificate issued by Amadeus reflected commission of Rs.65,71,690/-, the assessee distributed the amount of Rs.52,22,326/- amongst the members for services rendered by them in booking tickets etc. and am ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
