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2015 (6) TMI 521 - AT - Income TaxNon deduction of TDS on commission payment u/s 194H - assessee sold SIM/recharge cards and top-up cards to the franchisees at a concessional price - CIT(A) concluded that the transaction between the parties is on principal to principal basis and therefore, the concession given to the franchisees cannot be treated as commission, but trade discount - Held that:- As per third proviso to S.194H which is inserted by the Finance Act, 2007, no deduction need to be made on any commission or brokerage paid by BSNL to its Public Call Office franchisee, and this proviso was held to be clarificatory in nature in the case of CIT V/s. Bharat Sanchar Nigam Ltd. (2013 (3) TMI 199 - PUNJAB & HARYANA HIGH COURT). Having regard to the circumstances of the case, as noticed that the assessee being public sector undertaking stands on a different footing and the view taken in the case of Idea Cellular (2010 (2) TMI 24 - DELHI HIGH COURT) cannot be applied, since the relationship between the BSNL and the franchisee stands on a different footing and the same was recognised by the CBDT. In fact, the decision of Hon'ble Delhi High Court and other High courts, on this point were considered by Hon'ble Karnataka High Court in the case Bharti Airtel Ltd. V/s. Dy. CIT and others (2014 (12) TMI 642 - KARNATAKA HIGH COURT) while holding that Section 194H is not applicable . Since no jurisdictional High Court decision is available as on date, the latest decision of Karnataka High Court, which considered and distinguished earlier rulings of other High Courts, deserves to be followed. In fact, the first appellate authority has taken into consideration the circular issued by the corporate office of the BSNL dated 13.12.2007 and another circular dated 15.4.2008 while coming to the conclusion that the nature of the payment made by the assessee to its franchisee is trade discount only. Since the view taken by the learned CIT(A) is mainly based on the factual matrix of the case, the order passed by the learned CIT(A) does not call for any interference. - Decided against revenue.
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