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TMI Blog2018 (2) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... retail price at which the recharge coupons is sold to the customer then the provisions of section 194H cannot be applied on the assessee. - Decided in favour of assessee. - ITA No. 821/JP/2016 - - - Dated:- 13-10-2017 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER For The Assessee : Shri S.L. Poddar (Adv.) For The Revenue : Shri Raj Mehara (J.CIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order of ld. CIT(A) dated 19.05.2016 for the A.Y. 2011-12. 2. There is delay of 38 days in filing the present appeal the assessee has filed a petition for condonation of delay which is supported by an affidavit. 3. I have heard the ld. AR as well as ld. DR on condonation of delay of 38 days in filing the present appeal. The ld. AR of the assessee has submitted that in the month of May, 2016 wife of the brother of the assessee expired and therefore, the assessee was out of station during the period when the limitation for filing the present appeal was to expire. The ld. AR of the assessee has submitted that the delay in filing the appeal is neither intentional nor willful but due to the circumstances which were beyond control o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of recharge coupons as it launched scheme time to time. Thus the assessee has forcefully contended that the payment of discount is made by the company directly to the retailer and the assessee was under no obligation to pay discount or deduct tax u/s 194H. The ld. CIT(A) was not impressed with the contention of the assessee and upheld the disallowance made by the AO. 6. Before the Tribunal the ld. AR of the assessee has submitted that the assessee has no discretion in fixing percentage of discount in recharge coupons on sale by retaliators as the company has sole powers in fixing the above discount on sale as per the scheme from time to time. He has reiterated the contentions raised before the authorities below. The ld. AR of the assessee has relied upon the decision of Hon ble Karnataka High Court in case of Bharti Airtel Ltd. vs. CIT 372 ITR 33 and submitted that the Hon ble High Court while dealing with identical issue has held that the distributors does not earn any income at the time of selling recharge cards/vouchers rather the distributor incurred expenditure for purchase of these cards and only after resale of those recharge cards the distributor would derive income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee s firm engaged in the business of distributorship of Idea recharge cards. The issue involved in case of the assessee is in respect of sale of recharge coupons and not the sale of sim cards. Therefore to the extent the issue of sale of sim cards by the service provider it is held by the Hon ble Karnatka High Court in the case of Bharati Airtel Ltd. vs. CIT (supra) that the assessee is the service provider had no obligation to deduct TDS and accordingly when the service provider has is under no obligation to deduct tax, the distributor would also not under obligation to deduct TDS. However, the said decision is only on the issue of sale Sim cards and therefore, will not applicable in the case of the assessee. The Hon ble Supreme Court in case of Bharat Sanchar Nigam Ltd. vs. Union of India 282 ITR 273 as also observed in paras 85 and 86 which are reproduced as under:- 85. In that case Escotal was admittedly engaged in selling cellular telephone instruments, SIM cards and other accessories and was also paying Central sales tax and sales tax under the Kerala General Sales Tax Act, 1963, as applicable. The question was one of the valuation of these goods. The State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law. The same transaction may involve two or more taxable events in its different aspects. But the fact that there is overlapping does not detract from the distinctiveness of the aspects . No one denies the legislative competence of the States to levy sales tax on sales provided that the necessary concomitants of a sale are present in the transaction and the sale is distinctly discernible in the transaction. Therefore, as the issue of sale of sim cards is concerned the Hon ble Supreme Court has clearly held that the sale of sim cards merely incidental to the service being provided and only facilitates the identification of subscribers their credit and other details it would not be assessable to sale tax. As regards the sale of recharge coupons it is clearly a transaction of sale of goods as held by the Hon ble Supreme Court that the telephone is nothing but a service. However, since the service is provided by the company which is the service provider and assessee is only a distributor and intermediatetory, therefore, the tax liability for paying the commission, if any, is attracted u/s 194H only against the person responsible for paying the commission. In case in hand the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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