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TMI Blog2022 (1) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... - HELD THAT:- Ld.CIT(A) has passed an unclear and somewhat self-contradictory order. On the issue, he initially observes about Hon ble Karnataka High court decision being in favour of the assessee. Thereafter, he observes that some of the revenue s contentions have been accepted by the Hon ble High court. Thereafter, he observes that in accordance with the Hon ble High Court directions certain information was required from the assessee. After the receipt of information, he does not examine the same himself. He seeks for a remand from the AO. We find considerable cogency in the submission of the ld counsel that the details were submitted before ld CIT(A), who has not examined the same himself but has asked for the remand from the AO and he accepted the AO s remand. He noted that the assessee could not explain accounting in the books as books were not available and benefit of doubt cannot be given to the assessee. It is evident that the details were duly submitted before ld CIT(A). What stops ld CIT(A) from giving a finding himself instead of relying upon the report on the same by the AO which were duly objected by the assessee is not understood. Hence we deem it appropriate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.3. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not appreciating the fact that there is no payment/credit to the account of distributors by the Appellant towards discount extended to them and therefore, provisions of section 194H of the Act do not apply to such discount. 1.4. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not appreciating that discount allowed by the Appellant is not income in the hands of its distributors and that income, if any, arises only when the pre-paid SIM cards/talktime is further distributed by the distributors. 1.5. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in relying on the TDS officer's observation that the Appellant had failed to explain the accounting as books were not available without taking cognizance of the fact that the Appellant had duly furnished the accounting entries for the subject AY before the CIT(A) which clearly reflected that no discount has been recorded in its books of accounts. 1.6. On the facts and circumstances of the case and in law, the learned CIT(A) ignored that the accounting entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same stream of income, which is against taxation principles. 2.2. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in ignoring Circular no.275/201/95-IP (B) dated 29.5.1997 issued by the Central Board of Direct Taxes ('CBDT') which specifically confirms that in situations where the payee discharges the liability no further liability would devolve on the payer, and thus, the impugned order is illegal and arbitrary. 2.3. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not accepting the binding nature of the CBDT circular, the Judgment of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd. (293 ITR 226) and the judgment of the jurisdictional Mumbai Tribunal (reported in 135 TTJ 385) in the Appellant's own case. 2.4. On the facts and in circumstances of the case and in law, the learned CIT(A) has erred in ignoring the specific request of the Appellant to bring on record evidence that is critical and vital to the appreciation of the issue as well as the adjudication of the same and hence, liable to be quashed. 3. Ground No. 3 - No interest under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest under Section 201(1A) of the Act from the date on which taxes were deductible to the date of payment of the said taxes by the payees/deductees. Basis the details and clarifications provided by the Appellant, the learned TDS officer passed an order under Section 154 of the Act revising the demand to ₹ 12,90,28,277 under Section 201(1)/ 201(1A) of the Act. 7. Against the above order assessee appealed before learned CIT(A). As regards the issue of taxability of roaming charges the AO had opined that same was subject to TDS as per the provisions of section 194J read with section 9(1)(vii) of the Act as a nature of payment fall into the realm of the concerned section. Learned CIT(A) found that this issue is in favour of the assessee by several judicial pronouncements including that from Hon'ble High Courts and Tribunals. Learned CIT(A) held as under :- 3.6 Similar issue has been examined by this office in the case of the Appellant for prior years, ie. AYs 2007-08 to 2009-10. The relevant extract of the decision is reproduced below: 2.46. I have carefully perused the facts and submission of the appellant as well as the Assessing Officer's Order. This as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acterized as providing technical services. d) Vodafone East Ltd. vs. Add/. CIT[2015] 61 laxmann.com 263(Kol Trib.) wherein it is held that roaming charges did not require any human intervention and could not be regarded as fee for technical services requiring deduction of tax at source under section 194J. The Hon'ble Trib. has also held that in absence of human intervention, services rendered in context of impugned issue did not fall under definition of 'work' as defined in section 194C and, thus, provisions of section 194C were not applicable to payment of roaming charges and a/so that since assesses had net used equipment involved in providing roaming facility and it was only subscribers of assessee who used equipment, payment in question did not require deduction of tax at source under section 194-1. e) Ideai Cellular Ltd. Vs CIT[2016] 65 taxmann.com 116 Pune f) Dishnet Wireless Ltd. [2015] 60 taxmann.com 329 (Chennai - Trib.) g) Bharti Hexacom Ltd. Vs ITO (Jaipur Trib.) (ITA 656/JP/2010- Order dated 12.06.2015 2.48. The subject matter has been dealt in detail namely in the decision of the Hon'ble Karnataka High Court in the case of Vodaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the mere word agent or agency used in the agreement is not sufficient to lead to irresistible inference that the parties did, in fact, intend that the said status would be conferred. While interpreting the terms of agreement, the Court has to look to the substance rather than form. In other words, the mere formal description of a person as an agent or buyer is not conclusive, unless the context shows otherwise; if the property in the goods is transferred and get vested in the concessionaire at the time of delivery then he is thereafter liable for the same and would be dealing with them in his own right as a principal and not as an agent. In order to invoke the provisions of section 194H of the Act it has to be shown that the discount/ benefit given by the assessee is in nature of commission or brokerage. The Court further referred to distribution agreement to highlight that for the promotion of marketing and distribution of the products/services, the assessee availed services of distributors wherein each distributor has to provide services mentioned in the agreement and the assessee is no way liable to the customers. Therefore, the distributors agreement is on 'principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the different amounts between the price for which it was sold to the distributor and the ultimate price fixed by the middleman, which can only be considered as discount by the assessee to the distributor, Under the terms of agreement several obligations flow so far as the services to be rendered by the assessee to the customers are concerned. Therefore it cannot be said that there exists a relationship of 'principal and agent' and thus it was concluded that it is a sale of right to service and consequently the relationship between the assessee and distributor is that of 'principal of principal'. The assessee submitted that this aspect of the matter was not looked into by other High Court including the Hon'ble Andhra Pradesh High Court. 2.14 It would be pertinent to note that the Karnataka High Court decision in the case of Bharti Airtel Ltd vs DCIT (supra), had instructed that the accounting records of the assessee should also be verified to check whether or not discount was reflected in its books of accounts. In light of the aforesaid directions, the Appellant was asked to demonstrate as to how the accounting of sale of 'right to pre-paid services' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esee vide letter dated 31.1.2018 has given the accounting entries passed by it on sale of right to prepaid services to the prepaid distributors and the same was explained in detail. That no discount or commission is credited to the account of the distributor and only the discounted amount of right to prepaid services (i.e. net of discount) transferred by the assessee is recorded in the distributors/control account. Relevant extracts were duly submitted. Thereafter ld counsel pointed out that ld CIT(A) has duly noted assessee s submission in his order. The assessee has given details submission on the sales recorded and general ledger extract was also submitted. Hence ld counsel submitted that ld CIT(A) is totally incorrect in observing that the assessee has not submitted the details. Ld counsel submitted that since findings of ld CIT(A) is quiet contrary to the submission given to him, he submitted that the matter may be considered to be the remand of the AO. 12. Per contra, ld DR relied upon the orders of the authorities below. 13. Upon careful consideration, we note that Ld.CIT(A) has passed an unclear and somewhat self-contradictory order. On the issue, he initially o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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