The appeal by Trulymadly Matchmakers Private Limited is set against the order by the Commissioner of Income-tax (Appeals)-9, dated September 22, 2020, for the assessment year 2017-18. The primary contention involves the incorrect addition of sums due to alleged non-deduction of tax under Section 195 of the Income Tax Act.
The appellant, represented by advocate Manoneet Dalal and chartered accountant Anshul Kumar, contests multiple additions made by the Income-tax Officer of Ward-25(4), New Delhi. These include a significant addition of Rs. 17,83,947 allegedly due to the failure in tax deduction at source (TDS) for payments made to international parties for services rendered via digital platforms.
The primary issue revolves around the payments made to Apple iOS, Google, and LinkedIn. These payments, according to the appellant, did not require TDS under Section 195, as they were for services that do not fall within the taxable bracket in India. The appellant provided contracts and terms agreed upon with these platforms to substantiate that these were mere facilitations and not technical or managerial services liable for taxation.
Kul Bharat, the Judicial Member, analyzed the submissions and highlighted that the assessment failed to address whether the payments genuinely attracted TDS requirements under Section 195. Consequently, the matter was remanded back to the assessing officer with instructions to reassess the nature of the payments and the applicability of Section 195.
The Tribunal’s decision to remand the issue back for a thorough reassessment suggests a potential shift towards a more nuanced understanding of cross-border transactions and their tax implications. This case highlights the challenges in interpreting tax liabilities in the context of global digital transactions.
The Trulymadly Matchmakers Pvt. Ltd. vs. ITO case underscores the complexities of tax laws concerning international commerce and digital platforms. It opens up discussions on how Indian tax laws are applied to modern digital transactions and the need for clarity in tax statutes to keep pace with technological advancements.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform