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2021 (9) TMI 1222 - AT - Income TaxTDS u/s 194H - discount allowed to distributors/channel partners on the sale of recharge coupon vouchers and the starter kits for telecommunication services - Addition u/s 201(1) - whether the transaction of sale of recharge coupon vouchers and starter kits was done on principal to principal basis? - HELD THAT:- As in the case of TTSL [2015 (3) TMI 1023 - ITAT JAIPUR] followed the judgment of Bharti Airtel vs. DCIT [2014 (12) TMI 642 - KARNATAKA HIGH COURT] and held that the discount on sale of recharge vouchers and SIM cards by telecommunication company to its distributors did not amount to commission in terms of section 194H of the Act. Also in the case of Tata Tele Services Ltd.[2015 (3) TMI 1023 - ITAT JAIPUR] and Vodafone Cellular Ltd [2009 (4) TMI 209 - ITAT COCHIN] have also decided the issue in favour of the assessee by holding that the provisions of section 194H were not applicable to the transaction of sale of starter kits and pre-paid SIMs to distributors on principal to principal basis. Under such circumstances and taking guidance from the judgment of the Hon’ble Apex Court in the case of Vegetable Products [1973 (1) TMI 1 - SUPREME COURT] we hold that the view favouring the assessee needs to be taken. Thus we hold that the sale of recharge voucher coupons and starter kits and the discount offered to the distributors would not attract TDS provisions u/s 194H of the Act and as such no default u/s 201(1) of the Act can be attributed to the assessee. Accordingly, the order of the Ld. CIT(A), allowing relief to the assessee, is upheld and the grounds raised by the Department are dismissed.
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