TaxTMI 
TaxTMI 
2018 (11) TMI 876
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....nd circumstances of the case, the Tribunal was justified in holding that whether the assessee is liable to deduct TDS u/s 194H of the IT Act, as relation between assessee and distributor is that of principal to agent. 2. Whether in the facts and circumstances of the case, the Tribunal has erred in law in deleting the demand u/s 201(1) for non deduction of TDS u/s 194H on commission payment to various distributors. 3. However, now the issue is squarely covered by the decision of this court in ITA No.92/2018 (Commissioner of Income Tax (TDS), Jaipur vs. M/s. Idea Cellular Ltd.) decided on 12.4.2018 wherein it has been held as under:- "3. Now, the issue is covered by the decision of this Court in D.B. Income Tax Appeal No.....
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.... only the arrangement by which the amount which was to be received was reduced and no amount was paid as commission. 46. In that view of the matter, if we look at the provisions of Section 194H and even if explanation is taken into consideration, there is no occasion of invoking provisions of Section 194H, since the amount is not paid by the assessee. 47. Taking into account the conclusion which has been arrived at by the Tribunal is misdirected in view of the arrangement which has been arrived at between the company and the Distributor. Assuming without admitting, if the contention which has been raised before the Tribunal is accepted, the same can be at the most expenses which are not allowable under the Income Tax Act, ....
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....ailer. (iv) Regarding area of operation, it is the business policy of the assessee to give Distributor-ship for a particular area. Only on that basis, it will be erroneous to held that it is on Principal to Principal basis. For deciding the relation-ship on Principal to Principal basis, the criteria will not be of area of operation but agreement entered into between the parties. (v) Regarding the change in price it is always between the assessee or the company and the Distributor to decide who will absorb the loss. In that view of the matter, the findings arrived at by the Tribunal is erroneous. (vi) Regarding the return of goods after expiry date, it is always the understanding between the manufacturer and compan....
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....the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Distributor is not an agent, therefore, in our considered opinion, the provisions of Section 194H have wrongly been invoked, and therefore, the first issue is answered in favour of assessee and against the Department. 49. The second issue which has been raised for our consideration, as discussed hereinabove, the Management Information System was not a part of their books of accounts nor could have been relied upon by the Income Tax Authorities. The basis on which the proceedings were initiated, in our considered opinion, the Statutory Audit Report is final conclusion over the authorities under the Income Tax Act, t....
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....uired to be adopted as per settled law. Taking into consideration the above conclusion, the first issue is required to be answered in favour of assessee. 53. Regarding Section 194J of the Act, in view of the Kerala High Court decisions, the issue is answered in favour of assessee and third issue even as per the statutory definition, there is no service and Sections 201 and 194H would not apply in view of the agreement as referred hereinabove. Tata Teleservices 54. In view of agreement the issue regarding 194H and 194J as held in other cases, both the issues are answered in favour of the assessee. Vodafone 55. Issues regarding Sections 194H, 194J and 201 of the Act, they are answered in favour of ....