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TMI Blog2006 (1) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mr. Garnett from the bank, he could also make enquiries as to who paid the amount in the account of Mr. Garnett. On the other hand, the assessee has been able to place the evidence that Quebecor World of Canada had paid this amount as advance to Mr. Garnett for discharging his income-tax liability in India. It further shows that this money was returnable by Mr. Garnett to the Canadian company on receiving his salary from India. Accordingly, it is held that the Revenue has not discharged its onus to prove that any payment of salary was made by the assessee to Mr. Garnett during the year under consideration - We see no reason to go beyond the finding of fact recorded by the Tribunal that there was no actual payment of the salary by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligation for the assessee to deduct tax at source on the same. The finding recorded by the Assessing Officer to the effect that the alleged credits in the Indian Bank account tantamount to receipt of remuneration by the employee was also assailed. The Commissioner of Income-tax (Appeals) allowed the appeal in part and held that the assessee had paid the salary to Mr. Garnett, the expatriate employee through its partner abroad, but subsequently when the Revenue started surveys, the assessee in an attempt to get out of the mess took the plea that it had not made any such payment and that no tax at source was deductible. The Commissioner also held that both the assessee and its employee were trying to benefit from the defaults committed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act?" The Third Member agreed with the view taken by the Judicial Member of the Tribunal and opined that the obligation to deduct tax at source did not arise in the instant case as the salary payable to Mr. Garnett had not been actually paid to him. While saying so, the Third Member distinguished the decision of the Supreme Court in Raghava Reddi v. CIT [1962] 44 ITR 720 relied upon by the Accountant Member. The Third Member held that wherever Parliament intended deduction to be made at source even without actual payment to the recipient, it had specifically provided for the same as was the position in cases falling under sections 193, 194A, 194C and 195, etc. Reliance was also placed by the Third Member upon the decision of the Andhra Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other hand, argued that the majority view of the Tribunal on the interpretation of section 192 of the Act was unexceptionable. He urged that there was a basic difference between the taxability of an income in the hands of the payee and the obligation of the person making the payment to deduct tax at source. He contended that all that section 5(2)(b) of the Act envisaged was that even crediting of the amount in the account of the payee was sufficient to give rise to the liability to pay tax on the said amount even if actual payment thereof was not made or received by the payee. That was not however so in the case of section 192 of the Act where the obligation to deduct tax arises only in case actual payment of the amount is made to the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be made. No deduction at source is contemplated under section 192 in cases where a payment towards salary has accrued but is not made. This position becomes clearer if we refer to similar other provisions in the Act like sections 194B, 194BB, 194EE, 194F and 194L under which also a deduction at source is envisaged only if actual payment of the amount is made to the payee. In contradiction to that requirement, there are provisions in the Act which authorise deduction at source even in cases where the payment is either made to the payee or credited to his account. The provisions of sections 193, 194A, 194C, 194D, 194E, 194G, 194H, 194-I, 194J, 194K, 195, 196A, 196B, 196C and 196D are in this regard relevant. The inference therefore is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the Act, the apex court held that as soon as the money is credited to the account of the assessee it must be deemed to have received the same, hence, taxable. In arriving at the conclusion, the Supreme Court placed reliance upon its earlier decision in Raghava Reddi v. CIT [1962] 44 ITR 720. It is, therefore, evident that the Supreme Court was not dealing with a case involving deduction of tax at source under section 192 of the Act. It was, on the other hand, dealing with the question of taxability of the amount credited to the account of the assessee having regard to the provisions of section 5(2)(b) of the Act. The question whether the amount was taxable in the hands of the payee and, if so, for which assessment year is, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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