JCIT (TDS)(OSD)-2(3), MUMBAI vs. NIMBUS COMMUNICATIONS LTD, MUMBAI

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ITA 3948/MUM/2018Status: DisposedITAT Mumbai19 September 2019AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. This was based on the submission that the tax effect was below ₹50 Lacs, making the appeal not maintainable as per CBDT Circular No. 17/2019.

What were the facts?

The Revenue appealed the CIT(A)'s decision that guarantee commission paid by the assessee to banks was not covered under Section 194H of the Income Tax Act. The CIT(A) also held that no principal-agent relationship existed and the assessee was not liable for TDS.

What were the issues?

Whether guarantee commission paid to banks is covered under Section 194H for TDS purposes and if a principal-agent relationship exists. The maintainability of the appeal due to low tax effect was also a factor.

Which sections of the Income-tax Act were involved?

Section 194H,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI C.N. PRASAD, HON’BLE & SHRI RAJESH KUMAR, HON’BLESmt K.G. Mittal Ayurvedic

For Respondent: Shri S.K. Jain
Hearing: 19.09.2019Pronounced: 19.09.2019

O R D E R PER C.N. PRASAD (JM) This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-60, Mumbai [hereinafter in short “Ld.CIT(A)”] in Appeal No. CIT(A)-60/IT-100/ITO(TDS)-2(4)/2014-15 dated 26.03.2018 for the A.Y. 2012-13.

2.

The Revenue has raised the following grounds in its appeal: - “1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the payment of Guarantee

(A.Y: 2012-13) M/s. Nimbus Communications Limited Commission paid by the assessee to the Banks is not covered under "Commission or brokerage" as defined u/s 194H of the Act and the assessee was not liable to deduct tax at source under section 194H in respect of this amount? 2. On facts and in the circumstances of the case and in law, the CIT(A) erred in not confirming the order of the Assessing Officer treating the assessee in default u/s 201(1) in respect of amount of tax which has not been deducted u/s 194H and levying interest u/s 201 (1A) of the Act? 3. On facts and in the circumstances of the case and in law, the CIT(A) erred in holding that there does not exist Principal-Agent relationship between the Assessee and the Banks and thereby clearly ignoring the fact that in the entire process of facilitation of Guarantee Banks are nothing but a constructive agent for the assessee company? 4. On facts and in the circumstances of the case and in law, the CIT(A) erred in ignoring that the section 194H gives an inclusive definition of "Commission or Brokerage" and has wide coverage to clearly include the payment of Guarantee Commission paid by the assessee to the Banks?

3.

At the time of hearing Ld. DR has stated that the tax effect on the issue in the present appeal is below ₹.50 Lacs and in view of the CBDT Circular No. 17/2019 dated 08.08.2019 in F.No.279/Misc.142/2007-ITJ (Pt), the appeal of the Revenue is not maintainable. In view of the above submissions, we dismiss the appeal of the Revenue on account of low tax effect.

4.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the Court on 19th September, 2019

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