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Matrimony.com Limited. vs. The ACIT / DCIT / ITO - (Income Tax Appellate Tribunal) (20 Apr 2022)

TDS not liable to be deducted on Advertisement Expenses paid to Online Platforms


Direct Taxation

The assessee company is engaged in the business of providing services in connection with marriage alliance and related services. The company markets its product both through online and offline advertisements. During the relevant financial year, the company has availed the services of Facebook, Ireland Ltd., for advertisement in order to promote the business of matrimony and incurred advertisement cost. The AO during the course of assessment proceedings, on examination of financials noted that the assessee has not deducted TDS towards advertisement charges paid to Facebook, Ireland Ltd., according to the provisions of Section 195I of Income Tax Act, 1961 and hence, applying the provisions of section 40(a)(i) of the Act, disallowed the advertisement charges paid to Facebook.

Being Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) relying on the case law of Google India Pvt. Ltd., of ITAT, Bangalore confirmed the disallowance. Aggrieved, now assessee is in second appeal before the Tribunal.

The Court observed that ITAT, Bangalore in the case of Urban Ladder Home Décor Solutions Pvt. Ltd., considered the decision of Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd., vs. CIT wherein the Hon’ble Supreme Court exactly on same facts held that there is no requirement to deduct tax at source from the advertisement payments made for using the information technology facility u/s.195 of the Act. Thus, as the facts of the present case are exactly same with the one of Urban Ladder, the advertisement charges liable to be allowed as deduction.


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