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2015 (5) TMI 508 - AT - Income TaxTDS u/s 194H - Disallowance of discounts/ incentives paid to its buyers - CIT(A) deleted the addition - whether discounts/ incentive was in the nature of commission so as to attract TDS and disallowance can be made u/s 40a(ia)as held by CIT(A)?- Held that:- As relying on case of the Idea Cellular [2010 (2) TMI 24 - DELHI HIGH COURT] we endorse the finding of the ld CIT(A) that the payment made by the assessee to its sub-distributors constituted commission and tax had to be deducted at source on such payment and we find that Vodaphone company deducted TDS u/s 194H of the Act, on the payment of ₹ 16,15,873/- as the payments are in the nature of brokerage or commission paid to the assessee. Further the assessee in its written submissions has admitted the fact that the payment to the extent of ₹ 15,84,800/- were in the nature of commission, which were passed on to the dealers and retailers. The ld CIT(A) has rightly observed that CIFF ID incentives are the payments made by the assessee to its employees etc and DMS and Market expenses are also the expenditure made by it and it is only the First Call First Recharge (FCFR) incentive which is the “Commissions” which was passed on to the dealers/ retailers. And so this amount/ discount/ incentive alone attracts provision of TDS u/s 194H of the Act, we endorse this finding of the ld CIT(A). However we find force in the argument of the ld DR that the ld CIT(A) gave show-cause notice to the assessee and called for the details of the commission disbursed to its dealer to non-deduction of TDS, but we find that ld CIT(A) has not given any opportunity to the AO before embarking into such an exercise. The ld CIT(A) has given relief to the assessee of ₹ 9,94,673/-, because the discounts/ incentives / commission disbursed was less than ₹ 2,500/-. And has directed an addition of ₹ 3,06,460/- because the discounts and incentives to the dealers were more than ₹ 2,500/-. In such circumstances it would be just and proper to set aside the order of the ld CIT(A) and remand the matter back to the file of AO to examine and verify whether the commission/ discount/ incentive given by the assessee to its dealers are correct and we direct that AO shall examine and verify this fact aspect and the amount disbursed if it falls below ₹ 25,00/- it shall not attract TDS and the amounts disbursed which is more that ₹ 2,500/- shall attract TDS and shall be disallowed. - Decided in favour of revenue for statistical purposes.
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