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TMI Blog2015 (1) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... seen that in all these invoices, pre-payment discount were allowed by the assessee and these invoices are of the current year i.e. April, 2007 and the assessee asked the buyer to make payment of the balance amount against the invoiced price after adjusting the advance received by the assessee and pre-payment discount - Asking the buyer to pay lesser amount after adjusting discount or making payment of discount to the buyer is equivalent because in both the cases, the buyer receives the benefit - the benefit allowed by the assessee to its buyers under the name of discount is in fact in the nature of interest because the same is in consideration of receiving advance payment - on receiving advance payment, one may compensate the maker of advance payment by way of allowing interest or the same benefit can be given the name of discount but merely because a different nomenclature has been given, it does not change its character - TDS was deductible u/s 195 of the Act and therefore, the disallowance made by the AO is justified – thus, the order of the CIT(A) is set aside – Decided in favour of revenue. - ITA No. 92/LKW/2012 - - - Dated:- 5-9-2014 - Shri Sunil Kumar Yadav And Shri A. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961. 4. That the order of CIT(A) deserves to be vacated and the assessment order passed by the Assessing Officer be restored. 3. Learned D.R. of the Revenue supported the assessment order. He also submitted that payment of discount is in the nature of interest and therefore, TDS was deductible u/s 195(1) and hence, the order of CIT(A) should be reversed and that of the Assessing Officer should be restored. 4. As against this, Learned A.R. of the assessee supported the order of CIT(A). He also submitted that in the present case, there is neither payment of interest nor commission and therefore, no TDS was deductible. He placed reliance on the following judicial pronouncements: (i) Addl. CIT vs. Pearl Bottling (P) Ltd. [2011] 46 SOT 133 (Vizag.) (ii) G.E. India Technology Centre (P) Ltd. vs. CIT [2010] 327 ITR 456 (SC) (iii) Foster's India (P) Ltd. vs. Income Tax Officer [2008] 117 TTJ (Pune) 346 (iv) CIT vs. Singapore Airlines Ltd. [2009] 319 ITR 29 (Del.) (v) Income Tax Officer vs. Mother Dairy Food Processing Ltd. [2011] 7 ITR (Trib) 16 (Delhi) (vi) NMDC Ltd. vs. ACIT (TDS) [2011] 7 ITR (Trib) 690 (Vizag.) (vii) Decision of I.T.A.T. Allahabad Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 38 of the second paper book, it is seen that in all these invoices, pre payment discount were allowed by the assessee and these invoices are of the current year i.e. April, 2007 and the assessee asked the buyer to make payment of the balance amount against the invoiced price after adjusting the advance received by the assessee and pre payment discount. Asking the buyer to pay lesser amount after adjusting discount or making payment of discount to the buyer is equivalent in our considered opinion because in both the cases, the buyer receives the benefit. 6.2 Now in the light of these facts of the present case, we examine the applicability of the various judgments cited by both the sides. 6.3 The first judgment cited by Learned A.R. of the assessee is the decision of Tribunal having been rendered in the case of Pearl Bottling (P) Ltd. (supra). It was held by the Tribunal that when the assessee company is engaged in the manufacture and sale of soft drinks for which MRP has been fixed for the products and those products are supplied to the retailers on discounted rate, no TDS is deductible because the relation between the assessee company and its distributor is in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against providing of bank guarantee from Punjab National Bank, Mall Road Branch, Kanpur, India and the adjustments of the benefit allowed to the buyer has been adjusted in the invoices issued in India on the overseas buyer and under these facts, in our considered opinion, income in the hands of the buyer in the form of discount or interest (whatever name we give to it) is taxable in India and therefore, this judgment of Hon'ble Apex Court is also not rendering any help to the assessee. 6.5 The third judgment cited by Learned A.R. of the assessee is the Tribunal decision rendered in the case of Foster's India (P) Ltd. (supra). This judgment is in respect of TDS u/s 194H i.e. in respect of payment of commission whereas in the present case, the dispute is regarding TDS liability u/s 195. As per section 195 of the Act, the assessee is required to deduct TDS from any sum paid by the assessee to a non resident which is chargeable under the provisions of the Income Tax Act. Hence, it is not necessary that only on payment of commission or interest, TDS is deductible u/s 195 of the Act. In fact, TDS is deductible u/s 195 of the Act from any payment to a non resident which is char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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