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TMI Blog2022 (4) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... e not chargeable to tax in India under any provision of the Act. And in the case of LinkedIn the payment was purely advertisement income in the hands of non-resident. The issue whether any tax would be deductible u/s 195 of the Act, depends upon the nature of payment a person makes. In the case in hand it is the case of the assessee that in respect of the transactions in question, provisions of Section 195 of the Act do not apply. Authorities below have not adverted to this core objection of the assessee. Therefore, the impugned order is set aside on the issue of deductibility of tax qua the payments made to non-residents in relation to the aforementioned transactions in question. Ground allowed for statistical purposes. Disallowance of PF ESI contribution, deposited by the assessee late as stipulated under the respective Acts - HELD THAT:- This issue is covered in favour of the assessee by the judgment CIT Vs. AIMIL Ltd. [ 2009 (12) TMI 38 - DELHI HIGH COURT] as also the judgment in the case M/s Pro Interactive Services (India) Pvt. Ltd. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] wherei held hat the amount paid is allowed as an expenditure only when payment is actually m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in law in not appreciating the settled principle of law that wherever two views are possible in respect of any provision of law, then the view that is favorable to the assessee is required to be upheld. 3. That the Ld. CIT(A) has erred on facts and in law in upholding the addition of ₹ 37,868 alleging the same to be prior period expenses without properly appreciating the facts of the case. 4. The appellant reserves his right to add or delete any grounds of appeal at the time of hearing. 2. The facts giving rise to the present appeal are that the assessee filed its return of income on 30.11.2017 through electronic mode declaring income of ₹ 8,49,663/-. The case was selected for scrutiny under CASS. Subsequently the Assessing officer proceeded to frame assessment u/s 143(3) of the Income-tax Act, 1961, hereinafter referred to as the Act . Thereby the Assessing Officer made addition of ₹ 37,868/- on account of claim of TDS as expenditure made in the Profit Loss account of ₹ 37,868/-. Further, the Assessing Officer noticed that the assessee had made various payments in the nature of commission and professional fees. However, no tax was de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tancy or managerial service being provided by Google or Apple to the Appellant, and as such the payments were not chargeable to tax in India under any provision of the Act. LinkedIn.com 4.5 The payment made to Linkedin.com were for job postings and finding appropriate candidate for various openings in the company. 4.6 The payment to Linkedin.com was purely advisement income in the hands of nonresident, and as such the same was not chargeable to tax in India. Conclusion by Ld. AO 4.7 In assessment order, the Ld. AO held the TDS was applicable on such payments. However, the Ld. AO failed to point out any reason whatsoever as to under which provision of the Act, the income of the non-residents was chargeable to tax in India. The Ld. AO alleged that the Appellant has not furnished documentary evidence to clarify the nature of the transactions, despite the fact that the detailed business model of the Appellant and the nature of the transactions were duly explained during the course of assessment proceedings, (refer page 5 of the assessment order) Conclusion by Ld. CIT(A) 4.8 During the first appellate proceedings, the Appellant furnished the copi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ireland Ltd. and paid to the appellant after deduction of commission/fee by Apple Ireland ltd. Similarly, in the case of Google also, the mobile app of the appellant was also available to Android users through Google. In this case also Google collected the payments from the Android users. It also charged collection charges/ fee for collection of payment and remitting the same to the appellant. However, in the case of LinkedIn, the payment was made to LinkedIn for job posting only, which is in the nature of advertisement. It is further contended that there was no technical consultancy or managerial service being provided by Google or Apple to the appellant, and such payments were not chargeable to tax in India under any provision of the Act. And in the case of LinkedIn the payment was purely advertisement income in the hands of non-resident. The issue whether any tax would be deductible u/s 195 of the Act, depends upon the nature of payment a person makes. In the case in hand it is the case of the assessee that in respect of the transactions in question, provisions of Section 195 of the Act do not apply. I find that the authorities below have not adverted to this core objection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand is squarely covered in the favor of the Appellant and it is humbly prayed to kindly delete the addition in its entirety. 9. Learned Sr. DR opposed the submissions and supported the orders of the authorities below. 10. I have heard rival submissions, perused the material on record and gone through the orders of authorities below. The issue is regarding disallowance of ₹ 3,42,661/- on account of delay in depositing of employees contribution to Provident Fund/ ESI. In my considered view, this issue is covered in favour of the assessee by the judgment of the Hon ble Jurisdictional Delhi High Court in the case of CIT Vs. AIMIL Ltd. (2010) 321 ITR 508 as also the judgment in the case M/s Pro Interactive Services (India) Pvt. Ltd. in ITA no. 983/2018. 11. The Hon ble Jurisdictional Delhi High Court in case of CIT vs. AIMIL Ltd. (2010) 321 ITR 508 (Delhi), has held as under: If the employees' contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ES ..... X X X X Extracts X X X X X X X X Extracts X X X X
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