Ker HC to Municipal Corp.: Provide Complaint No. to Citizens to Report Unauthorized Waste Dumping  ||  JKL HC: Can’t Fastened Liability Based on Chief Exam. Without Affording Opportunity to Cross Examine  ||  Ker HC to State: Consider Representation by CBSE Schools Assoc. Against Proposed Fee Regulatory Comm.  ||  Ker. HC: Printing Agencies Required to Remove Illegal Hoardings Within 7 Days of Notice  ||  Cal. HC: Police Can’t Use Power U/S 160 CrPC to Call/Arrest Someone Unconnected With Alleged Offence  ||  Cal. HC: Acquiring Property in Name of Wife is Not Benami Transaction  ||  Bombay HC Upholds Validity of Section 13(8)(b) and Section 8(2) of IGST Act  ||  Del. HC: Haj Pilgrimage is a Religious Practice  ||  SC: If Sufficient Evidence of Involvement Exists, Person Not Named in FIR can be Added as Accused  ||  SC: Possessory Right of Prospective Purchaser Protected U/S 53A of TP Act    

Myntra Designs Pvt. Ltd. vs. Deputy Commissioner of Income Tax (International Taxation), Circle-1(2) - (Income Tax Appellate Tribunal) (03 Sep 2021)

Payments made by the non-resident company, cannot be considered as "royalty payments" and do not give rise any income chargeable in India under Indian IT Act


Direct Taxation

The Assessee herein is an Indian company. The AO noticed that the Assessee has made payments to M/s Face Ireland Ltd towards advertisement charges. The AO held that, said payments are taxable in India primarily as 'royalty' and alternatively as FTS/FIS. Accordingly, the AO raised demand under Section 201(1) of Income Tax Act, 1961 (IT Act) @ 20% of the payments and also charged interest under Section 201(1A) of the Act in all the three years.

Learned CIT(A) has confirmed the demand raised by the AO under Section 201(1)/201(1A) of IT Act treating the Assessee as an 'assessee in default' for non-deduction of tax at source from the payments made to M/s Facebook Ireland towards advertisement fees.

The facts prevailing in the instant cases are identical with the facts of Urban Ladder Home Décor Solutions Pvt. Ltd. with regard to the payments made to Facebook, Ireland towards advertisement charges. Accordingly, in view of said decision, present Tribunal held that, the payments made by the Assessee the non-resident company Facebook, Ireland cannot be considered as "royalty payments" and hence they do not give rise any income chargeable in India under Indian Income tax Act in all the three years under consideration.

In that view of the matter, there is no requirement to deduct tax at source from those payments under Section 195 of the Act. Hence the Assessee cannot be considered as an Assessee in default under Section 201(1) of the IT Act. Accordingly, the orders passed by CIT(A) for the years under consideration are set aside and the AO is directed to delete the demand raised under Section 201(1) of the IT Act and also the consequential interest charged under Section 201(1A) of the IT Act in all the three years under consideration. Appeals of the Assessee are allowed.


Share :        

Disclaimer | Copyright 2023 - All Rights Reserved