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2015 (11) TMI 1521 - AT - Income TaxTDS u/s 194H - discount given to distributors on sale of pre-paid products, being, "right to use Airtime for a specified value" - non-deduction of tax - Held that:- The relationship between assessee and its distributors qua the sale of impugned products is on principal to principal basis; the consideration received by assessee is sale price simpliciter.There is no relationship of Principal and agent between assessee and distributors as held by authorities below their orders are reversed. Looking at the transaction being of Sale/Purchase and relationship being of principal to principal the discount does not amount to commission in terms of sec. 194H, the same is not applicable to these transactions. Therefore, assessee cannot be held in default; impugned demand raised applying sec. 194H is quashed. - Decided in favour of assessee Demanding the tax which is already subjected to tax in the hands of the distributor - Held that:- We have already held while deciding Ground that the margin paid to the distributor is not a commission which is liable for deduction of tax at source u/s 194H. When there is no commission, the liability for deduction of tax at source does not arise at first place. In any case, the ld. CIT(A) has given a specific direction ‘’the alternative plea of the appellant was allowed in view of the decision of M/s. Hindustan Coca Cola Beverages (P) Ltd. (2007 (8) TMI 12 - SUPREME COURT OF INDIA ). AO is directed to allow the benefit of taxes paid by the deductees after due verification’’. However, the ld. AR has not pointed out as to how the said direction causes prejudice to the assessee. Hence, we find no reason to interfere with the findings of the ld. CIT(A) on this issue.
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