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2017 (9) TMI 105 - AT - Income TaxTDS u/s 194H - assessee sold RTL products to the end users through retailers at a discounted price on the MRP - disallowance u/s 40(a)(ia) - AO treated the discount allowed to the retailers as commission - Held that:- The assessee i.e. the distributor M/s. Dhruba Communication, records the sales to the retailers at a discounted rate which is below the MRP. This is the rate at which the sale is made. There is no payment of the differences between discounted rate and the MRP by the retailer to the distributor or vice versa. This quantum of discount from the MRP has never been claimed as expenditure by the assessee in its books of account. Under these circumstances, we are of the considered opinion that no disallowance can be made under section 40(a)(ia). When nothing is claimed as a deduction under sections 30 to 38 of the Act or in the computation of income no disallowance can be made under section 40(a)(ia) of the Act. In the instant case, the impugned amount of discount of ₹ 71,42,777 over the gross value of RTL products sold/supplied by the assessee to the 110 retailers has not been claimed as deduction by the assessee under sections 30 to 38 of the Act. Hence, the question of making any disallowance or adding back of the said discount to the income of the assessee under section 40(a)(ia) of the Act does not arise. - Decided in favour of assessee.
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