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Provisions expressly mentioned in the judgment/order text.
ITAT allowed the assessee's appeal regarding disallowance under section 40(a)(ia) for target, consistency, and cash discounts provided to spare parts dealers. The tribunal distinguished between principal-to-principal dealership arrangements and agency relationships, holding that discounts given under dealership agreements constitute genuine commercial discounts rather than commission payments requiring TDS deduction. Following the Supreme Court precedent in CIT v. Ahmadabad Stamp Vendors Association, the tribunal found that bulk purchase discounts are sales transaction discounts, not subject to section 194H. The revenue authorities failed to investigate dealer agreements or establish any agency relationship. Without evidence that dealers acted as agents rather than independent businesses, and given the consistent decades-long practice by this established automobile manufacturer, the tribunal concluded section 40(a)(ia) provisions were inapplicable to these commercial discount arrangements.
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