TDS deposit without actual deduction of TDS from payment is to be treated as income

Formula One World Championship Ltd. Vs DCIT (ITAT Delhi)

ITAT Delhi held that deposit of TDS without actual deduction of TDS on the payment made, such TDS amount is to be treated as income of the assessee partaking the character of RPC fee.

Facts-

The assessee is a non-resident corporate entity incorporated in the United Kingdom (UK) and a tax resident of the UK. Therefore, the assessee is eligible to claim benefits under India – UK Double Taxation Avoidance Agreement (DTAA). The assessee is the commercial rights holder of the Formula One World Championship.

The assessee is exclusively entitled to award event promoters with the right to host, stage and promote Grand Prix on various Circuits worldwide and in that capacity entered into an RPC with Jaypee Sports International Ltd. [now merged with Jaiprakash Associates Limited (JAL)] granting right to host the Indian Grand Prix.

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