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2013 (11) TMI 371 - AT - Income TaxWhether the payment of “discount” and “rebate” was subject to deduction of TDS – There was “agency agreement” and the “agreement for the appointment of consignment stockist” - In addition to the commission the company at it’s discretion allow an annual quantity discount as per slabs - Although a credit period of 30 days is permissible for payment but an incentive of ‘cash-discount’ shall be allowed if the dealers make the payment within 7 days – Held that:- On the basis of the terms and conditions of those agreements and also the nature of business activity of the assessee, assessee was not required to deduct the TDS on the impugned discounts and rebates - Facts of the case have revealed that on accomplishment of the targets the ‘consignment stockiest’ is permissible to retain the settled discount. It is not the case that the assessee is passing the discounts/rebates to the ‘consignment stockiest’. Such stockiest is required to sell certain minimum guaranteed quantities of the assesee’s product per month and therefore permitted to retain it’s discount on passing over of the proceeds. The discounts and rebates depend upon the quantity of purchase as also the early payment. Therefore, the rebates are in the nature of deduction from the sale price. Payments required to be made within a specific time as per the schedule fixed. Therefore, there was a rebate in respect of early payment - Certain incentives as given by the assessee did not constitute a ‘commission’; hence, out of the purview of the provisions of Section 194H of IT Act - In the light of the judgments cited above i.e. Hindustan Coca Cola Beverages [2007 (8) TMI 12 - SUPREME COURT OF INDIA], the assessee was not simultaneously required to deduct the tax at source – Decided in favor of Assessee. Applicability of section 194J or section 194C of the Income tax act – Held that:- The scope of work of Nandesari Environment Control Ltd. and M/s Gujarat Enviro Protection & Infrastructure ltd. was for collection, transportation and disposal of Hazardous Solid Waste from GFL, Dahej site to Gujarat Enviro Protection & Infrastructure ltd., Surat as per GPCB norms. Again the work of Nandesari Environment Control Ltd. was for operation and maintenance charges and was also based on the quantity lifted. The work of these two companies were of collection, transportation and disposable of waste and these two companies were not giving any technical or managerial or consultancy services as envisaged in Section 194J of the I.T. Act - Collection, transportation and disposal of waste by those two companies can be said to be covered under the provisions of Section 194C of IT Act – Decided in favor of Assessee.
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