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2018 (12) TMI 271 - AT - Income TaxTDS u/s 194H - discount sale of Set Top Boxes (STBs) and recharge vouchers (RCVs) - non deduction of tds - Held that:- The assessee in this case is engaged in business of providing direct to home (DTH) services. The assessee enters into agreement with the distributor for sale of Set Top Box (STB) and recharge coupon vouchers. As per agreement products are sold to distributor at discounted price, as agreed. The distributor/dealer sells these items to customers/subscribers at a price not exceeding MRP on the product. As per the agreement payment of each order for the above items is to be made by distributor either at the time of placing the order or at the time of delivery. Apart from the above assessee also provides festival/seasonal discounts to the distributors. For these discounts assessee does not make any payment rather it issues credit notes and same is subsequently adjusted from the payment due from the distributor. The expenditure of discount is recognized in books of account. But the same is netted from sale, so in the financial statements the discount amount is not reflected. In the case of Jt. CIT (TDS) vs. Bharat Business Channels Ltd. [2018 (5) TMI 229 - ITAT MUMBAI] the ITAT, Mumbai on similar issue following the decision in the case of Bharti Airtel Ltd. [2014 (12) TMI 642 - KARNATAKA HIGH COURT] had decided the same issue in favour of the assessee. Thus we hold that the assessee was not liable to deduct the tax at source on the impugned amounts in this case. - Decided in favour of assessee. TDS u/s 194C OR 194J - TDS on payment made to installation service provider - Held that:- This case is squarely covered by the decision of the Tribunal in the case of M/s. Bharat Business Channels Ltd. (2018 (5) TMI 229 - ITAT MUMBAI) wherein as a DTH operator, same as the Assessee had also obtained services of Installation Service Providers to install Dish Antenna, Set-Top Box, etc. at the subscriber's premises similar to Tata Sky. That the Hon'ble Tribunal observed that the installation work does not require any special technical expertise and can be done by any sound person on reading through the installation manual. That the Hon'ble Tribunal also noted that the installation services providers were given basic training to make them understand the process of Installation. That having regard to the facts, the Hon'ble Tribunal held that the assessee had correctly deducted tax under section 194C of the Act and tax was not required to be deducted under section 194J. TDS u/s 194C OR 194J - TDS on payment of document management charges - Held that:- In this case, the assessee was engaged in the life insurance business. That it had obtained document management services which inter alia included document management services, document delivery and collection services and document storage, etc. That the assessee had deducted tax under section 194C while making payment for these services and the Income-tax Authorities alleged that these are technical / managerial services and should be subject to TDS under section 194J. That on appeal, the CIT(A) had held in favour of the assessee. That on appeal by the Income tax Authorities to the Tribunal, the Hon'ble Tribunal noted that the work assigned to the service provider was not a technical or professional work which required special skills but simple, basic and repetitive nature of work and accordingly subject to tax under section 194C of the Act. No liability on deductor to pay tax when tax is already paid by deductee - Held that:- CIT(A) has granted some relief to the assessee on the issue of TDS deduction u/s. 194H on discount and incentive on sale of STBs and RCVs on the ground that the recipients would have paid the applicable tax on the respective taxable income. Hence, in view of the decision of the Hon'ble Apex Court decision in the case of Coca Cola Expt. Corpn. Vs. ITO [1998 (3) TMI 7 - SUPREME COURT] the taxes cannot be recovered from the assessee. In view of our adjudication in assessee’s appeal that the assessee is not liable for tax deduction at source under section 194 H, adjudication of this ground is now only of academic interest, hence we are not engaging into the same.
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