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2015 (4) TMI 765 - AT - Income TaxAllowability of expenditure claimed under the head "dealer's scheme and incentives" - TDS not deducted u/s 194H - Payment made to distributors of SIM card / recharge coupon on activation of SIM - Held that:- We find that the nature of payment made to the distributors of SIM card/recharge coupon on activation of SIMs arose before the hon'ble Delhi High Court in CIT v. Idea Cellular Ltd. [2010 (2) TMI 24 - DELHI HIGH COURT] and it was held that the same was in the nature of commission and was subject to TDS under section 194 of the Act. Further, the hon'ble Kerala High Court in Vodafone Essar Cellular Ltd. [2010 (8) TMI 691 - KERALA HIGH COURT]observed that the SIM cards/ recharge coupons were only for the purpose of rendering service to the subscriber of the mobile phone and the distributor was only a middleman arranging customers or subscribers for the service provider and payment made on account thereof for the supply of SIM card and recharge coupon was in the nature of commission and discount to distributors and exigible to tax deduction at source under section 194H of the Act. In the entirety of the facts and circumstances of the case, we find no merit in the plea of the assessee in this regard. Reliance placed by the learned authorised representative for the assessee on the relationship of principal to principal is misplaced in view of the ratio laid down on identical issue as in the present appeal by the hon'ble Delhi High Court in Idea Cellular Ltd. [[2010 (2) TMI 24 - DELHI HIGH COURT], the hon'ble Kerala High Court in Vodafone Essar Cellular Ltd. [2010 (8) TMI 691 - KERALA HIGH COURT] and the hon'ble Calcutta High Court in Bharti Cellular Ltd.[2011 (5) TMI 590 - CALCUTTA HIGH COURT]. In view thereof, we reverse the findings of the Commissioner of Income-tax (Appeals) and disallow the expenditure of ₹ 46,48,960 booked under the head "dealer's scheme and incentives" as not being an allowable expenditure for failure to deduct tax at source in view of the provisions of section 40(a)(ia) of the Act. - Decided against the assessee.
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