As per CBDT circular sec 194 applied on advertisement when client make payment to add agencies but not when payment made by add agencies to media

Last updated: 31 March 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
The brief facts of the case are that the assessee is a private limited company engaged in the business of posting advertisement in various publication including newspapers. It has filed its return of income on 29.7.2005 declaring a total income of Rs.45,550. The case of the assessee was selected for scrutiny assessment and a notice under sec. 143(2) of the Act dated 26.7.2006 was issued and served upon the assessee. On scrutiny of the accounts, learned Assessing Officer found discrepancies in the receipts appearing in the TDS Certificate vis-à-vis shown by the assessee in the profit and loss account. He observed that in the TDS certificate contract receipts are shown by the assessee at Rs.11,90,516 whereas in the profit and loss account, it has shown Rs.7,73,137. In response to the query of the Assessing Officer, it was contended by the assessee that the company accepts orders both with and without material for printing. It books sales in its books of account and charges sales tax on deliveries made against orders inclusive of material, still tax has been deducted at source from payments made to it. The assessee has furnished the details, however, Assessing Officer was not satisfied with the explanation of the assessee, he made the addition of Rs.4,17,379 which is the difference between Rs.11,90,516 – Rs. 7,73,137.

Citation :
Global Media Services Pvt. Ltd. 4162 Sector-B, Pocket 5 & 6, Vasant Kunj, New Delhi-110070 (PAN: AABCG2896G)(Appellant)Vs. Income-tax Officer,Ward 12(2),New Delhi. (Respondent)