9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 689 - AT - Income TaxTDS u/s 194H - Disallowance u/s 40(a)(ia) for failure to deduct TDS - discounts allowed to the distributors on the sale of starter kits/pre-paid sim cards and recharge vouchers - Held that - Sale of starter kits/sim cards is purely a purchase/sale transaction on principal-to-principal basis and there is no relationship of agency, hence no obligation was cast upon the assessee to have deducted tax at source u/s 194H in respect of the discounts given to the distributors on the sale of the same - thus in the absence of any obligation cast upon the assessee to have deducted tax at source in respect of the discounts given to the distributors on the sale of the prepaid starter kits/sim cards, no disallowance u/s 40(a)(ia) was called for in the hands of the assessee - Decided against the revenue.
Issues Involved:
Disallowance under section 40(a)(ia) of Income Tax Act for failure to deduct TDS on discounts given to prepaid distributors. Analysis: Issue 1: Disallowance under section 40(a)(ia) of Income Tax Act - The revenue challenged the order of the CIT(A) which deleted the disallowance of ?66,03,56,590 made under section 40(a)(ia) of the Income Tax Act. - The AO observed that the assessee did not deduct TDS on discounts extended to prepaid distributors, treating them as commission under Sec.194H of the Act. - The assessee argued that the discounts were part of the distributor's margin and not commission, hence not subject to TDS. - The AO disallowed the amount, assessing the income of the assessee at ?247,65,56,980. - The CIT(A) relied on previous judgments in the assessee's favor and deleted the disallowance, citing the absence of an obligation to deduct TDS on discounts. - The Tribunal upheld the CIT(A)'s decision, emphasizing that the sale of starter kits/sim cards was a principal-to-principal transaction, not requiring TDS deduction under Sec.194H. - The Tribunal concluded that no disallowance under Sec.40(a)(ia) was warranted, affirming the CIT(A)'s order. - The appeal filed by the revenue was dismissed, affirming the decision in favor of the assessee. This detailed analysis provides a comprehensive overview of the judgment, highlighting the key legal issues and the reasoning behind the decision.
|
