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TMI Blog2012 (7) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 194 H read with those of section 40 (a)(ia) of the Act and thereby deleting the addition of Rs. 10,33,985/-. 2. As per the assessment order, the assessee firm was engaged in the trading of mobile and fixed phone connections of M/s. Tata Telecom Ltd. on commission basis. The assessee was found to have debited expenses of Rs.10,39,190/- towards commission from its receipts. From the commission account furnished by the assessee on query, it was seen that the assessee had not deducted tax at source in accordance with the provisions of section 194 H of the Act from the payment of commission exceeding Rs. 2,500/-. The AO observed that each of the employees of the assessee had been appointed on a fixed salary and the salary was not performanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the assessee, on the other hand, has strongly relied on the impugned order. It has been contended that undisputedly, the payment of salary was made to the employees of the assessee firm, on the basis of activation of connection; that the appointment letters in this regard were duly filed before the AO, but the AO wrongly did not take them into consideration, whereas the ld. CIT(A) has correctly appreciated the evidence brought on record; that the payment as per the activated connections cannot be held to be commission, even though it has been shown as commission in the profit and loss account; that the provisions of section 194 H of the Act are not at all applicable to the payments made by the assessee, as has rightly be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the activated connections, was a part of salary. The payments were made to the Territory Manager, the Sales Executive and the Senior Sales Executive, strictly in accordance with the conditions contained in the appointment letters. 9. The learned CIT(A), it is seen, has duly taken into consideration all the above facts and has rightly arrived at the conclusion that the payments in question are covered within the definition of "salary" in terms of section 17 of the Act, due to which, such payments are not hit by the provisions of section 194 H of the Act. 10. In view of the above, we do not find any error in the order of the CIT(A) and we hereby confirm the same. The grievance sought to be raised by the Department is found to be shorn of m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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