Case Law Details
DCIT Vs Prakash Chandra Mishra (ITAT Jaipur)
ITAT Jaipur held that equalization levy not applicable as role of the assessee is merely conduit between the entity carrying out the advertisement and Google. The ultimate benefit of such advertisement is not desired by the assessee.
Facts- It was noticed by the assessing officer, that the assessee has debited a sum of Rs. 8,89,35,558/- being online advertisement (adwords) charges paid to M/s. Google Asia Pacific Pte. Ltd., Singapore, a non-resident having no permanent enterprise(PE) in India. Since the payment has been made to a non-resident by the assessee for advertisement purposes in the digital mode on behalf of his clients and that no tax was deducted as equalization levy on the payment made to the non-resident, the assessee was required to show cause as to why the provision of section 40(a)(ib) of the Act should not be invoked and the entire sum of Rs.8,89,35,558/- should not be disallowed and added to the income. AO confirmed the same.
Being aggrieved, assessee preferred an appeal before CIT(A) which was allowed. Accordingly, being aggrieved, revenue has preferred the present appeal.
Conclusion- The role of the assessee is merely conduit between the entity carrying out the advertisement and Google. The ultimate benefit of such advertisement is not desired by the assessee but it is derived by the advertisers, who are client of the assessee.
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