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2022 (3) TMI 292 - AT - Income TaxTDS u/s 194H - disallowance made u/s. 40(a)(ia) on sales rebate - HELD THAT:- As relying on ASUS INDIA PVT. LTD.[2020 (10) TMI 510 - ITAT MUMBAI] principal- agent relationship between the assessee and the dealers/distributors is not discernible. Therefore, the rebate/discount given cannot be treated as commission under section 194H - Our aforesaid reasoning rendered in context of ground no. 2, would equally apply to this ground as well. Therefore, the disallowance made under section 40(a)(ia) deserves to be deleted. As regards the contention of the learned Departmental Representative that the provision is not allowable as expenditure, we are afraid, we cannot entertain such claim at this stage. As could be seen from the facts on record, the AO has not raised any doubt with regard to the genuineness or allowability of expenditure. He has disallowed part of such expenditure simply for the reason that tax has not been deducted at source in terms of section 194H. Commissioner (Appeals) has also approved the aforesaid decision of the Assessing Officer. Therefore, the limited issue before us is the validity of disallowance under section 40(a)(ia) - Decided in favour of assessee. Disallowance u/s. 40(a)(ia) by disallowing the expenditure on account of refurbish and rebate on defective products - HELD THAT:- AR before us had brought several fresh facts which was apparently either not argued before this Tribunal or stated before the lower authorities while adjudicating the issue under consideration. Hence, we deem it fit and appropriate in the interest of justice and fair play, to set aside this issue to the file of the ld. AO for denovo adjudication in accordance with law. In the said set aside assessment proceedings, the ld. AO shall factually examine all the contentions of the assessee and take a reasoned view uninfluenced by either his views taken in the assessment order or by the order of the ld. DRP or by this Tribunal in A.Y₹ 2016-17 and 2017-18. This direction is given in view of the fact that this issue being a repetitive issue as pointed out by the ld. AR, would have the recurring effect in all the years for the assessee. So, it would be relevant to bring all the facts pertaining to this issue on record. Accordingly, the ground No. 5 raised by the assessee is allowed for statistical purposes. Transfer Pricing (TP) adjustment made in respect of provision of Marketing Support Services (MSS) - Comparabile selection - HELD THAT:- Axis Integrated Systems Ltd., is functionally not comparable with the marketing support services rendered by the assessee. We direct the ld. TPO to exclude Inmacs Management Services Ltd., from the final list of comparables chosen by him for benchmarking the marketing support service transaction of the assessee.
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