THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1), PANAJI vs. M/S BEIERSDORF INDIA (P) LTD., PANAJI

The learned CIT(A) erred in stating and comparing that these payments are like salary payments, wherein TDS is not only when employee has income in excess of minimum amount chargeable to tax, when the fact is that these are no salary payments and there is nothing on record to show employer-employee relationship between the assessee and the person who have received payments.”

The learned senior DR, supporting the assessment order, submitted that the payment made by the assessee to ISR through carriage and forwarding agents is a commission paid for sale of goods which was in the nature of commission liable for deduction of tax at source u/s 194H of the Income Tax Act, 1961 (for short, ‘the Act’). The learned Sr. DR vehemently pointed out that the learned CIT(A) has erred in stating and comparing these payments with salary payments wherein TDS is not only when employee has income in excess of minimum amount chargeable to tax when the fact is that these are no salary payments and there is nothing on record to show employer-employee relationship between the assessee and the person who have received payments. Replying to the above, the learned counsel for the assessee, placing copies of the orders of the ITAT, Panaji Bench dated 28.11.2016 in ITA No.173/PAN/2016 and dated 14.07.2017 in ITA No.67/PAN/2016 for assessment years 2012-13 and and 2013-14, respectively, submitted that the sole issue in the Revenue’s appeal is squarely covered in favour of the assessee by the orders of the Tribunal for the immediately preceding two years wherein it has been held that after perusing the C&F Agreements and also the statement of remuneration paid to ISR, copies of appointing orders, samples of the expenses, claim settlements and also copies of the sample bills in respect of expenses, which had been claimed as reimbursement which are basically travel expenses as also the good and lodging expenses. It was also held that the cost to the company in respect of salary did not exceed the basic minimum liability to tax, therefore, that being so, the findings of the learned CIT (A) are after appreciating the facts and the Revenue has not been able to dislodge these findings of facts. With these observations the appeal of the Revenue for both the years have been dismissed by the Tribunal. The learned Sr. DR has candidly agreed to the fact that the facts and circumstances pertaining to the sole issue of the instant year are quite same and similar to the facts and circumstances for assessment years 2012-13 and 2013-14, therefore, we have no hesitation to hold that the issue in question i.e., the requirement of TDS deduction u/s 194H of the Act on reimbursement of expenses is not applicable and so the learned CIT(A) was right in allowing relief to the assessee by following the orders of the Tribunal for assessment years 2012-13 and 2013-14 in para 3.3 of the first appellate order. It is also relevant to note that the learned Sr. DR has also not controvered that the appeals of the Revenue before Hon'ble Bombay High Court have been withdrawn on 11.11.2019 by the Department and the issue has been settled in favour of the assessee finally.

In view of the foregoing discussion, we reach to a final conclusion that the issue is covered in favour of the assessee by the order of the Tribunal in assessee’s own cases for assessment years 2012-13 and 2013-14 and since the facts and circumstances of the present assessment year 2014-15 are quite same and similar with the said two immediately preceding assessment years, therefore, the issue is squarely

In the result, the appeal of the Revenue is dismissed.