Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 1128 - ITAT KOLKATATDS u/s 194H - non deduction of tds - payment of incentive to the dealers for the purpose of promotion in selling its goods beyond a targeted quantum - Held that:- In the present case, the ld. CIT(A) examined the copies of agreements of dealers and he found that dealers are the receipts of the amount given by the assessee as incentive. The dealers are buying the goods from the assessee on their own risk. The assessee paid the incentive to the dealers for the purpose of promotion in selling its goods beyond a targeted quantum. Therefore, we see no relation of principal and agent as agitated by the ld. DR. If that be the case, the applicability of section 194H and invocation of section 40(a)(ia) of the Act for violation of section 194H is bad under law. Thus, it is clear that the liability to deduct TDS under section 194H of the Act arises only when a person acts on behalf of another. The incentives received by the distributors/dealers is neither contractual transaction nor payment commission or brokerage under the relation of principal and agent and which are a strict requirement of section 194H of the Act to deduct the TDS. Therefore we hold that the payments paid to the distributors/ dealers by way of incentives would not come under the purview of section 194H and invocation thereon under section 40(a)(ia) is bad and hence no interference is required with the order of the CIT(A), therefore, it is confirmed. - Decided against revenue.
|