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TMI Blog2024 (2) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the hotels relating to provision of lodging and accommodation services through its platform. Assessee being a service provider assures the minimum benchmarks which the service recipient will receive or expect to receive from service provider. In case such benchmarks is exceeded, then the service fee is payable by the service recipient to service provider and in case of shortfall, the service provider is required to meet the same. On such business model, provisions of section 194C of the Act provides that any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract between the contractor and a specified person shall deduct tax on the sum paid or credited to the account of the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated, the facts of the case are that the assessee electronically filed its Return of Income on 29.09.2015 declaring loss of Rs. 29,82,76,660/-. Return was selected for scrutiny assessment through CASS and accordingly, statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has not deducted tax at source on minimum guarantee expense of Rs. 3,61,98,948/-. The assessee was asked to show cause why this expense should not be disallowed u/s 40(a)(ia) of the Act. 5. The assessee, in its submissions dated 04.12.2017, explained that these payments are not governed by provisions of Chapter XVII-B of the Act and therefore, no TDS has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shortfall. 11. The ld. counsel for the assessee vehemently stated that no work was carried out so as to invoke provisions of section 194C of the Act. 12. Per contra, the ld. DR strongly supported the findings of the Assessing Officer and stated that the assessee is in fact providing service towards minimum occupancy of the rooms in the hotels and, therefore, ought to have deducted tax at source. 13. We have carefully considered the orders of the authorities below. Facts on record show that the assessee for the purpose of carrying on its business operations enters into merchant agreement with various hotels for facilitating reservation/booking of hotel rooms through the platform of the assessee. As per the terms of the said agr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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