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2023 (9) TMI 425 - AT - Income TaxTDS u/s 194H - discount allowed to retailers by the assessee dealer/distributors on sale of prepaid sim cards/mobile recharge cards - whether the lower authorities were justified in making disallowance u/s 40(a)(ia) on account of non-deduction of TDs on such discount given by the assessee to the retailers on sale of sim card/recharge coupons - HELD THAT:- The issue is squarely covered by the recent decision of the Hon’ble Bombay High Court in the case of ‘Commissioner of Income Tax (TDS), (Pune) v. Idea Cellular Ltd.’ [2020 (1) TMI 1652 - BOMBAY HIGH COURT] wherein held when the transaction was between two persons on principal-to-principal basis, deduction of tax at source as per section 194H of the Act, would not be made since the payment was not for commission or brokerage. The case of the assessee is on better footing. In the above referred to the decision, Idea Cellular Company owned the sim cards which were further sold to the distributors. However, in the case in hand, the assessee is a distributors/dealer and has sold the sim card on discounted rate to the retailers and the relationship between the assessee and retailers was not of principle agent, rather, the same was principle to principle basis. In view of the above decision of the Bombay High Court in the case of owner company itself, this issue is decided in favour of the assessee. Disallowance made by the lower authorities on this issue is ordered to be deleted. Decided in favour of assessee.
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