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2011 (5) TMI 590 - HC - Income TaxPre-paid Sim cards and rechargeable Coupons - liability of TDS u/s 194H - Commission or franchisee - Assessee in default - Held that:- It is settled principle of law that merely because some terms and conditions and restrictions having been imposed in the agreement, the relationship between principal to principal is not changed and varied - in this case that the transaction in case of pre-paid Sim cards, and rechargeable Coupons, sufficient stocks are to be kept by franchisee, and then the same are to be sold to the retailers at a rate stipulated by the assessee at ₹ 324 and the retailer is allowed to sell it to the ultimate customer at the maximum price again fixed by the assessee, say at ₹ 330, the assessee is to realize lesser rate say at ₹ 317 per Sim card from franchisee. Thus discount of ₹ 7 is given. Therefore after selling all the Sim cards and Pre-paid Coupons to the retailers the franchisee is to make payment of sale proceeds to the assessee after deducting a discount of ₹ 7 per Sim card. Thus this receipt of discount at the rate of 7 is in real sense commission paid to the franchisees. Hence all the trappings of liability as agent, of the franchisee towards assessee subsists, there has been indirect payment by the assessee to the franchisee of the commission and the same is attractable under section 194H - Decided against the assessee
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