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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI & SHRI V. DURGA RAO
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER .
This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-II, Chennai, dated 08.10.2014 for the assessment year 2010-2011.
I.T.A.No.126/Mds/2015 :- 2 -:
The Revenue has raised the following grounds:-
2.1. The learned Commissioner of Income Tax (Appeals) erred in allowing the assessee’s claim on credit for TDS of ₹2,46,80,256/-. 2.2 The ld. Commissioner of Income Tax (Appeals) ought to have appreciated the fact that credit for tax deducted at source can be given only to the extent of proportionate income offered for assessment. 2.3 Having regard to the Hon’ble High Court’s decisions in the case of CIT vs. Pushpa Vijay & Anr (Ker) 67 DTR 354 (2012) wherein it is held that credit for TDS can be given only where tax is deducted on the income which is offered for assessment, the ld. Commissioner of Income Tax (Appeals) ought to have upheld the action of the Assessing Officer in disallowing the assesee’s claim on credit for TDS.
The facts of the case are that the assessee filed its return of income for assessment year 2010-2011 on 24.09.2010 declaring an income of �13,62,81,800/-. The return was processed u/s.143(1) and selected for scrutiny. The Assessing Officer while computing the assessment u/s.143(3) of the Act, assessee the income at �13,62,81,800/- However, the Assessing Officer has not allowed the assessee’s claim of credit for TDS of �2,46,80,256/- on the ground that the concerned income was not offered to tax in the return of income.
Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals).
4. The Commissioner of Income Tax (Appeals) observed that the Assessing Officer’s action of disallowing the assessee’s claim of credit I.T.A.No.126/Mds/2015 :- 3 -: for TDS of �2,46,80,256/- on the ground that the concerned income (subscription charges) was not offered to tax in the return of income .
The Assessing Officer in his order noticed that the assessee, the subscription charges of �.86,34,97,146/- to which the TDS of �2,46,80,256/- was not included in the Profit and Loss account and the Assessing Officer disallowed the credit for the corresponding TDS. The ld. Authorised Representative for assessee company submitted that the issue has already been adjudicated by the Tribunal, in assessee’s own case for the assessment year 2006-2007 in dated 21.10.2013, allowed the appeal in favour of the assessee, and the same order is also applicable for the assessment year 2009-2010 under consideration also. The Commissioner of Income Tax (Appeals) observed that the Tribunal had held that the subscription charges collected by the assessee was not the income of the assessee. It was collected on behalf of M/s. Sun Network Ltd, and in-turn remitted to Sun Network Ltd. The cable operators are deducting the TDS in the name of the assessee as it was paid to the assessee. Hence, the assessee is entitled for the credit on the TDS made by the cable operators. The relevant portion of the order of the Tribunal in assessee’s own case for the assessment year 2006-2007 in ITA No.884/Mds/2011, dated 21.10.2013 are reproduced:-
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“3. From the perusal of the facts which have not been disputed by the Revenue, it is clear that the assessee has remitted the entire gross amount received from the cable operators to M/s. Sun TV Network Ltd., The amount remitted by the assessee to M/s. Sun TV Network Ltd., includes the amount of TDS deducted by the cable operators at the time of payment made by them to the assessee. In lieu of the services rendered by the assessee, the assessee is entitled to receive fixed commission. Since tax has already been deducted and paid to the Government at the time of making collections, the assessee is entitled to get the credit of the same while receiving commission income. M/s. Sun TV Network Ltd., had engaged the services of the assessee for collection of the subscription amount against commission. However, the cable operators at the time of payment of subscription, deducted the tax at source and remitted the remaining amount to the assessee. The subscription collected by the assessee is not its income and hence is not taxable in the hands of the assessee. The assessee is only a nodal agency for collecting subscription on behalf of M/s. Sun TV Network Ltd. The amounts collected by the assessee are credited to the separate account ‘Subscription Charges’. The said account is debited at the end of Financial Year when the amounts are paid to M/s. Sun TV Network Ltd. As the subscription collected by the assessee from various cable operators is not the income of the assessee, the same is not shown in Profit & Loss account. The subscription amount is the income of M/s. Sun TV Network Ltd. and as such is taxable in the hands of M/s. Sun TV Network Ltd. However, the cable operators are deducting tax at source on the payments of subscription made to assessee, whereas, the assessee is remitting the gross amount to M/s. Sun TV Network Ltd., the assessee is entitled to receive credit of the tax deducted at source u/s. 199 of the Act subject to production of TDS Certificates received from respective deductors. The levy of tax on the commission received would amount to double taxation.
The other grounds for invoking the provisions of section 263 are consequential to the main issue discussed above. Since, we are striking the impugned order on the main issue itself, the consequential issues automatically do not survive. Thus, in view of the peculiar facts and circumstances of the case, we allow this appeal of the assessee and set aside the impugned order.”
I.T.A.No.126/Mds/2015 :- 5 -:
In the present case, the facts and circumstances are exactly identical to those involved in the case of the assessment year 2006-07 of the assessee’s own case. Respectfully following the decision of the Tribunal the assessee is entitled for the credit on the TDS made by the cable operation on the subscription charges. The Assessing Officer was directed to allow the assessee’s claim for TDS of �2,46,80,256/-.
Against this, the Revenue is in appeal before us.
We have heard both the parties and perused the material on record. The main contention of the assessee’s counsel is that the assessee remitted the entire subscription income to M/s. Sun TV and there is no element of income in the hands of the assessee from subscription received from other parties on behalf of M/s. Sun TV and the assessee received only commission from it. To examine the same, the Bench called for Profit and Loss account and Leger accounts to know, how the subscription received was accounted in assessee’s book. The assessee’s counsel filed only financial statement and not filed ledger accounts of subscription received account.
Hence, we are not in a position to express any opinion whether the assessee is having any element of income from subscription I.T.A.No.126/Mds/2015 :- 6 -: charges received from various parties. Therefore, if the entire subscription received by the assessee is transferred to M/s. Sun TV and the assessee is entitled only for commission on subscription income, then the Tribunal’s decision relied by the assessee’s counsel is applicable. Accordingly, we are remitting the entire issue back to the file of the Assessing Officer to consider the issue afresh in the light of the above observation.
The appeal of the Revenue in is partly
allowed for statistical purposes.
Order pronounced on Friday, the 28th day of August, 2015 at Chennai Sd/- Sd/- (वी. दुगा� राव) (चं� पूजार� ) V. DURGA RAO (CHANDRA POOJARI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य/ ACCOUNTANT MEMBER चे�नई/Chennai. �दनांक/Dated: 28.08.2015. KV आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2.��यथ�/ Respondent 3. आयकर आयु�त (अपील)/CIT(A) 4. आयकर आयु�त/CIT 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.
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