|The Tax Publishers2020 TaxPub(DT) 4721 (Bang-Trib)
INCOME TAX ACT, 1961
No TDS is attracted on payments made by television channels/newspaper companies to the advertising agency for booking or procuring of or canvassing for advertisements. Where impugned payments were made in the capacity of agent to the publisher of newspaper. The mode of discharge of liability has no bearing on the applicability of TDS provisions.
Tax deduction at source - Under section 194C - Payment towards advertisement space in newspaper -
The assessee company had entered into Agreement with BCCL for selling and utilizing advertisement space on a principal to principal basis in publication of Times of India (Kannada edition) owned by BCCL. The assessee had paid Rs. 6.80 crores to BCCL towards purchase of saleable advertisement space in the publication. The AO observed that, the expenditure incurred towards advertisement charges shall attract the provisions of section 194C of the Act. Since the assessee has not deducted TDS on advertisement charges, the provisions of section 40(a)(ia) of the Act were applicable and disallowed the claim. Held: It is needless to mention that CBDT circulars are binding on the authorities employed for execution of the provisions of the Income Tax Act so long as they are beneficial to the assessee. CBDT Circular No. 5/2016 is squarely applicable to the facts of the case as impugned payments were made in the capacity of agent to the publisher of newspaper. The mode of discharge of liability has no bearing on the applicability of TDS provisions.
Relied:Times VPL Ltd. v. CIT ITA No. 274 of 2013, dt. 17-10-2019 : 2019 TaxPub(DT) 7752 (Karn-HC).
FAVOUR : In assessee's favour.
IN THE ITAT, BANGALORE BENCH
SUBSCRIBE FOR FULL CONTENT