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2019 (6) TMI 1477 - AT - Income TaxTDS u/s 194H - discount given at the time of sale of SIM cards or recharge coupons to the distributors - Whether a payment received or receivable by the distributor for the services to be rendered to the assessee and the same fell within the definition of commission or brokerage under explanation (i) to Sec. 194H? - contention of the assessee that the relationship between the assessee and the distributors was on principal to principal basis - HELD THAT:- In identical issue was decided in favour of the assessee by ITAT Ahmedabad Bench in the case of Vodafone Essar Gujarat Ltd. vs. ACIT [2015 (7) TMI 474 - ITAT AHMEDABAD] is correct wherein as held there is no relationship between the assessee and the sub-distributor as well as the retailer. Thus, it is a sale of right to service - The relationship between the assessee and the distributor is that of principal to principal and, therefore, when the assessee sells the SIM cards to the distributor, he is not paying any commission; by such sale no income accrues in the hands of the distributor and he is not under any obligation to pay any tax as no income is generated in his hands - The deduction of income tax at source being a vicarious responsibility, when there is no primary responsibility, the assessee has no obligation to deduct TDS - Decided in favour of assessee.
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