AI Drafter 
TaxTMI 
TaxTMI 
2017 (10) TMI 1527
X X X X Extracts X X X X
X X X X Extracts X X X X
....he sake of convenience and brevity. First, we take up Revenue's appeal in ITA No. 953/JP/2016 pertaining to the Assessment Year 2014-15. In this appeal, the Revenue has raised the following grounds of appeal:- "1. On the facts and in the circumstances of the case, whether the assessee is liable to deduct TDS u/s 194H of the Income Tax Act, 1961 as the relation between assessee and distributors is that of principal to agent. 2. The Ld. CIT(A) has erred in law in deleting the demand u/s 201(1) for non-deduction of TDS u/s 194H of the Income Tax Act, 1961 on commission to various distributors." 3. Only effective ground in this appeal is against holding that the assessee is not liable to deduct the TDS u/s 194H of the Income Tax Act, 1961 in respect of the commission paid to its distributors. 4. At the outset, Ld. Counsel for the assessee submitted that this issue is squarely covered in favour of the assessee by the Judgment of the Hon'ble Jurisdictional High Court in assessee's own case in DB Income-tax Appeal Nos. 169/2015, 170/2015, 171/2015, 8/2016, 45/2016, 48/2016 & 49/2016. Ld. Counsel for the assessee drew our attention to Page No. 134 of the Judgment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....TDS on discount, appeal no. 776/JPR/ 13-14 & 438/JPR/14-15 order dated 24.09.2015 and 23.10.2015. Respectfully following the above orders of Hon'ble ITAT Jaipur & CIT(A)-3 Jaipur's. I find that no tax is deductible u/s. 194H of the Act on discount allowed to the Distributor." Since the facts of this year are the same as in AY 2012-13 & 2013-14 ground no. 1 & 2 are allowed and decided in favour of the appellant. Accordingly the ground no. 1 & 2 are allowed." The Hon'ble Jurisdiction High Court in D.B. Income Tax Appeal Nos. 169/2015, 170/2015, 171/2015, 8/2016, 45/2016, 48/2016 & 49/2016 has held as under:- "Idea Cellular 58. As the agreement is produced, issues are answered in favour of assessee in the departmental appeals. 59. Even the contention which has been raised by the counsel for the assessee that the final tax is paid by the Distributor and not by the agent, the revenue is not at loss in any form. 60. In view of above, all the issues in each appeal are answered in tabular form as follows:- Srl No. Appeal No. Ques. 1 Ques.2 Ques. 3 Ques. 4 Ques. 5 1. 205/2005 In favour of assessee and agai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Department and in favour of assessee -- -- -- 14. 126/2015 Against the Department and in favour of assessee Against the Department and in favour of assessee -- -- -- 15. 131/2015 Against the Department and in favour of assessee Against the Department and in favour of assessee -- -- -- 16. 132/2015 Against the Department and in favour of assesse Against the Department and in favour of assessee -- -- -- 17. 168/2015 Against the Department and in favour of assessee Against the Department and in favour of assesse -- -- -- 18. 169/2015 Against the Department and in favour of assessee Against the Department and in favour of assessee -- -- -- 19. 170/2015 Against the Department and in favour of assessee Against the Department and in favour of assessee -- -- -- 20. 171/2015 Against the Department and in favour of assessee Against the Department and in favour of assessee -- -- -- 21. 195/2015 Against the Department and in favour of assesse Against the Department and in favour of assessee -- -- -- 22. 08....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse 35. 105/2016 Against the Department and in favour of assessee Against the Department and in favour of assessee Against the Department and in favour of assessee Against the Department and in favour of assessee Against the Department and in favour of assessee 36. 106/2016 Against the Department and in favour of assesse Against the Department and in favour of assesse -- -- -- 37. 107/2016 Against the Department and in favour of assessee Against the Department and in favour of assesse -- -- -- 38. 108/2016 Against the Department and in favour of assessee Against the Department and in favour of assesse -- -- -- 39. 94/2016 Against the Department and in favour of assesse Against the Department and in favour of assesse -- -- -- 40. 200/2016 Against the Department and in favour of assessee Against the Department and in favour of assessee Against....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hether the taxes have been paid by the recipient on their income. WITHOUT PREJUDICE TO GROUND NO.I, GROUND NO. II: NONDEDUCTION OF TAX AT SOURCE ("TDS") UNDER SECTION 194H OF THE ACT ON DISCOUNT ALLOWED TO THE PRE-PAID DISTIBUTORS ("the Distributors"): 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the order passed by the TDS Officer under section 201(1)/201(1A) of the Act by treating "discount" offered by the Appellant to the Distributors as "commission" and thereby treating the Appellant as an "assessee in default" under section 201(1) r. w. s. 194H of the Act. 2. The Appellant most humbly prays that the discount allowed to the Distributors be held as not liable to TDS under section 194H of the Act as the relationship between the Appellant and its Distributors is on Principalto-Principal basis and, thus, the demand raised in the impugned order in respect of the alleged failure to deduct tax under section 194H of the Act be deleted. WITHOUT PREJUDICE TO GROUND NO.I AND II: GROUND NO. III: 1. On the facts and in the circumstances of the case and in law, the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e books net of discount. ii. Discount or so called commission has not been separately paid to distributors, thus there is no payment of any income as emphasized by Hon 'ble Karnataka High Court in Tata Tele judgment(supra). iii. What has been effected by way of these sale transactions is sale of service embedded or encrypted on SIM cards, as held by Hon'ble Karnataka High Court and treating same as 'Principal to Principal transaction'. iv. The facts and circumstances of assesses case are on parity with our ITAT judgment in the case of Tata Tele Services, which we have to respectfully follow. v. In view of the facts, circumstances, rival submission and material available on record assessee is not liable for deduction u/s 194H. Therefore we reverse the orders of lower authorities on these issues and delete the demand." Similar view has been taken by the Hon'ble Jurisdictional Tribunal in the case of Tata Teleservices (ITA No. 309/JP/2012, 502, 503, 504 & 505/JP/2011, order dated March 13, 2015) and Bharti Hexacom (ITA No. 656/JP/2010 order dated June 12, 2015). My own judgment in assessee's case for AY 2011-12 & 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department 9. 2/2014 In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department 10. 3/2014 In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department 11. 4/2014 In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department In favour of assessee and against the department 12. 124/2015 Against the Department and in favour of assessee Against the Department and in favour of assesse -- -- -- 13. 125/2015 Against the Department and i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and in favour of assesse Against the Department and in favour of assessee 30. 100/2016 Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse 31. 101/2016 Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assessee 32. 102/2016 Against the Department and in favour of assessee Against the Department and in favour of assessee Against the Department and in favour of assessee Against the Department and in favour of assessee Against the Department and in favour of assesse 33. 103/2016 Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse Against the Department and in favour of assesse 34. 104/2....