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TMI Blog2023 (5) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuant to the judgment of Hon ble Delhi High Court only precedent at that point of time therefore, Ld. CIT(A) has not considered the contrary view taken by other High Courts while the passing the impugned order. In fact the terms and conditions of the agreement between the assessee and distributors/dealers as well as treatment of the transactions in the books of the assessee are essential consideration for determining the nature of transaction have not been taken into account either by the AO or by the Ld. CIT(A). Hence matter requires a proper verification/ examined and fresh adjudication at the level of the AO after considering terms and conditions of the agreement between assessee and distributors/dealers as well as the treatment of these transactions in the books of the assessee. Appeals of assessee are allowed for statistical purposes. - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER Assessee by Shri Sumit Nema, Sr. Adv. And Shri Gagan Tiwari, Adv Revenue by Shri P.K. Mishra, CIT-DR ORDER Per Bench: These two appeals by the assessee are directed against two separate orders of Ld. Commissioner of Income Tax (Appeals) (in short Ld. CIT(A)-II, Indo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT(A) has further erred in not allowing the benefit of ratio laid down by Hon'ble Supreme Court in case of Hindustan Coca Cola Beverages. 2.2) The learned CIT(A) has further erred both on facts and in law in ignoring the applicable ratio as laid down by Mumbai Tribunal in Vodafone case (2010- TIOL-789-ITAT-MUM) while dealing with the applicability of the judgment of Hon'ble Supreme Court in the matter of Hindustan Coca-Cola Beverages Ltd. wherein it was held that when the Permanent Account Numbers are made available to the Assessing Officer, it would not be unreasonable on the part of the assessee to ask the Assessing Officer to have the payments verified from the records of the Assessing Officers within whose jurisdiction the payees are assessed. 3.The learned AO has erred both on facts and in law in charging interest of Rs.15,649,727/- u/s 201(1A) of the Act. The learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law in upholding the action of the learned AO. 4.The appellant craves leave to add, alter or amend the ground of appeal at a later stage. 2. The assessee company is engaged in the business of providing telecom services includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular Ltd. ITANo.267/Ind/2010, ITANo.268/Ind/2010 ITANo.181/Ind/2012 and upheld the order passed by the AO. 3. Before the tribunal the assessee has relied upon the various decisions of the different benches of the Tribunal in favour of the assessee whereas the department has relied upon the decision of Coordinate Bench of this Tribunal as well as the decisions of Hon ble Delhi High Court, Hon ble Kerala High Court and Kolkata High Court. The Ld. Sr. counsel of the assessee has reiterated his contention as raised before the Ld. CIT(A) and submitted that the nature of transaction between the assessee and distributors/dealers is not a commission but the assessee is allowing only discount to the distributors/dealers. He has filed specimen copy of the agreement between the assessee and distributors and submitted that from the terms and conditions of this agreement it cannot be inferred that the relationship between assessee and dealer is that of principal and agent but the relationship is principal to principal and therefore, amount released by the assessee to the distributor in respect of providing services through post-paid and prepaid SIM as well as recharge of vouchers is nothing but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Vodafone Essar Cellular vs. ACIT reported 194 taxman 518 and decision of Hon ble Kolkata High Court Bharati Cellular Ltd. Vs. ACIT reported 12 taxmann.com 30. 6. He has also relied upon the order of the authorities below and submitted that the ld. CIT(A) has passed impugned order by following order of this Tribunal in case of Idea Cellular Ltd. vs. ITO dated 11.12.2014. 7. We have considered the rival submission as well as relevant material on record. There is no quarrel that there are divergent views on the issue involved in this case wherein one set of decisions passed by the Hon ble Karnataka High Court, Hon ble Bombay High Court and Hon ble Rajasthan High Court are in favour of the assessee whereas the another set of decisions of Hon ble Delhi High Court, Hon ble Calcutta High Court and Hon ble Kerala High Court are in favour of the revenue. The details of the decisions given divergent views in favour of the assessee and revenue are as under: In favour of assessee: i. Bharati Airtel Ltd. vs. DCIT, 52 taxmann.com 31 (Kar) ii. CIT vs. Vodafone Cellular (ITANo.1152/2017 (Bom) iii. Hindustan Coca Cola vs. CIT 402 ITR 539 (SC) In favour of Revenue : i. ACIT vs. Bharati Cellular L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 201(1)/201(1A) by following the judgment of Hon ble Delhi High Court and consequential judgment of the Tribunal following the judgment of Hon ble Delhi High Court. It is pertinent to note that though the AO has recorded the fact that distributors are appointed by the assessee through written agreements however, the AO has not considered the terms and conditions of the agreement which are crucial for determination of the nature of transaction between the assessee and distributors/dealers whether the payment allowed by the assessee is in the nature of discount or commission attracting the provision of section 194H. Further the another aspect which is also relevant for determining nature of the transaction being payment allowed by the assessee is treatment given by the assessee to the said transaction in its books of account. Both of these aspects are inevitably relevant for determining the nature of the transaction and consequential liability/obligation of the assessee to deduct the tax at source as per provisions of section 194H of the Act. 10. The Ld. Sr. counsel of the assessee has filed before us the specimen copy of the agreement entered into between the assessee and the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount specified in any notice of demand under section 156 is not paid the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid . From the above, it is apparent that the legislation provides that interest should be levied from the day immediately following the end of the period mentioned in 156 notice. Hence the computation of month would be from immediately next day of time provided in notice till the time of payment of tax. 11. Since the issue arises in this appeal is consequential to the issue of determination of the nature of transaction as involved in A.Y.2010-11. Therefore, in view of our order for A.Y.2010-11 setting aside the issue to the record of the AO, this matter is also set aside to the record of the AO for fresh adjudication as per the outcome of the set aside proceeding for A.Y.2010-11. 11. In the result, appeals of assessee are allowed for statistical purposes. Order pronounced in the open court on 25.05.2023. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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