TaxTMI 
TaxTMI 
2019 (2) TMI 1966
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....ssee and the distributor would be that of "Principal and Principal" and not of "Principal and Agent." 3. The Ld. CIT(A) has erred in relying on the decision of Hon'ble Karnataka High Court in the case of Bharti Airtel Ltd. (52 Taxman.com 31) (2014) which has not been accepted by the department. For these and grounds that may be raised during the course of appeal and actual hearing, the appellant prays that the order of learned Commissioner of Income Tax (Appeals) may he set aside and cancelled." 3. The grounds raised by the revenue in ITA No. 2206/Bang/2018 are as under. "1) The order of the Ld. CIT(A) is opposed to law & facts of the case. 2) The Ld. CIT(A) has erred in law as well as on facts in cancelling the order u/s. 201(1) & 201(1A) by stating that once it is held that the right to service can be sold then the relationship between the assessee and the distributor would be that of "Principal and Principal" and not of "Principal and Agent." 3) The Ld. CIT(A) has erred in relying on the decision of Hon'ble Karnataka High Court in the case of Bharti Airtel Ltd. (52 Taxman.com31)(2014) which has not been accepted by the departme....
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....urt that Hon'ble Delhi High Court has considered the judgement of Hon'ble Kerala High Court rendered in the case of CIT Vs. Director, Prasar Bharti as reported in (2010) 325 ITR 205 (Kerala) and also another judgement of Hon'ble Kerala High Court rendered in the case of Vodafone ESSAR Cellular Ltd. Vs. ACIT as reported in (2011) 332 ITR 255 and also another judgement of Hon'ble Calcutta High Court rendered in the case of Bharti Cellular Ltd. Vs. ACIT &Anr. as reported in (2013) 354 ITR 507 (Cal) and the issue was decided in favour of the revenue and against the assessee. In particular, our attention was drawn to the Para on the last page of this judgement of Hon'ble Calcutta High Court. It was pointed out that regarding the judgement of Hon'ble Karnataka High Court rendered in the case of Bharti Airtel Ltd. Vs. DCIT (supra), it is held by Hon'ble Calcutta High Court that this judgement has no assistance because in this case, the Hon'ble Karnataka High Court has decided the issue in favour of the assessee on this basis that the assessee and service provider were on the principal to principal basis. But as per Hon'ble Calcutta High Court in that case, their lordships were not....
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....s can be seen on page no. 75 of paper book i.e. on page no. 54 of the judgement in para 42 of its judgement, Hon'ble Rajasthan High Court has considered and examined the applicability of the judgement of Hon'ble Calcutta High Court rendered in the case of Hutchison Telecom East Ltd. Vs. CIT as reported in [2015] 375 ITR 566 on which reliance has been placed by ld. DR of revenue. He also pointed out that in para nos. 58 to 60 of this judgement, Hon'ble Rajasthan High Court has noted that in respect of assessee Idea Cellular Ltd., agreement was examined and issues were decided in favour of the assessee in the department appeals. He drawn our attention to para 59 of the judgement and pointed out that this is also noted by Hon'ble Rajasthan High Court that as per the argument of ld. counsel of the assessee, the final tax is paid by the Distributor and not by the agent and the revenue is not at loss in any form. At this juncture, the bench wanted to see the agreement of the assessee with the distributor. In reply, ld. AR of assessee submitted that a specimen copy of distributorship agreement with Mohit Enterprises is available on pages 1 to 41 of paper book. He pointed out that as ....
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....clause (l) of Para 6.3 of the distributorship agreement, relationship between the assessee and the distributor can be termed as that of principal to agent. For ready reference, we reproduce this Para from page nos. 18 and 19 of the paper book. "6.3 (l) and its Authorised Retailer shall deliver Prepaid SIM Cards / Scratch Vouchers / Recharge Vouchers / V-top up etc., to a prospective subscriber/customer only after collecting duly filled in Customer Application Form (CAF) along with copies of Proof of density (POI) and Proof of Address (POA) and, after due verification vis-a-vis the originals. The SCD and its Authorised Retailer shall seal and sign a declaration that they have seen the subscriber, the original Proof of Identity (POI) and Proof of Address (FDA), and the photograph of the Subscriber matches with the Proof of Identity and the Subscriber. The SCD shall before the purchase by the end user/ prospective subscriber/customer of the Prepaid SIM Cards / Scratch Vouchers / Recharge Vouchers / V-top up etc. ensure that the end user completely fills out the Terms and Condition leaflet and the Customer Application Form and submits the Proof of Address (POA) and Proof of Id....