9911796707
TMI Blog2017 (12) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... cular no. 715 dated 08.08.1995 which states that the tax has to be deducted on the payments made to advertising agency. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred by ignoring the observation of the A.O. that assessee has raised bills in the name of advertising agencies for the cost of space and deducted agency commission towards commission to the advertising agencies which indicates that space was purchased from the assessed on basis of specifications by actual party and the agency acted as an agent for the assessee." 2. Non-appeared on behalf of the assessee, we therefore decided dispose of the appeal after hearing the ld. DR. 3. After hearing the ld. DR and going through the order of the tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agency commission towards commission to the advertising agencies. This clearly indicates that the space was purchased from the assessee company on the basis of specifications by the actual party and the agency acted as an agent for the assessee company. There is no doubt that the same is being paid to the agencies for their services only and it cannot be termed as a discount as the benefit of that advertisement does not go to the agency. The agency on their part is getting the reimbursement of the entire amount from the customer to whom the real benefit of the advertisement accrues. Thus, the advertisement agency is in fact working for the assessee for providing them ads for the space for which they are being given commission. AO observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the prescribed rate. In the instant case no payments are made by the appellant to the agencies. On the other hand, consequent to the sale of space to the agencies, the agencies are billed by the appellant on the net amount after discount is allowed to them. Thereafter the payments are made by the agencies to the appellant on the net amount billed. In other words payments are not made by the appellant but by the agencies against sale of space by the appellant. Since, the assessee is not responsible for making any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n then amount of Rs. 11,250/- has been reduced on account of agency commission. Therefore, it will clearly demonstrate that assessee is concerned only with the amount to be realized finally which is the same in both type of transactions. Therefore, the nature of amount agency commission is only a discount though it has been described as "agency commission". Both the transactions are on principal to principal basis. The case law relied upon by the assessee before CIT (A) and before us supports the case of the assessee. Therefore, we are of the opinion that Id. CIT (A) is right in holding that disallowance could not be made as assessee was not under an obligation to deduct tax u/s 194H. We decline to interfere. This ground of the revenue for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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