TMI Blog2012 (10) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... es rendered to the distributors of the assessee. Hence, the same would fall under the definition ‘commission or brokerage’ u/s. 194H as decided in M/s Vodafone Essar Cellular Ltd. vs. ACIT [2010 (8) TMI 691 - KERALA HIGH COURT] hence, principally, in agreement with the view taken by the AO on this issue - Considering the submissions of assessee that the payments in this case on many occasions did not cross the threshold limit for deduction of tax u/s. 194H submitting the ledger of discount a/c in the books of assessee. Thus upon careful consideration of the documents in this regard the issue is remitted to the file of the AO to ascertain the exact amount of tax which the assessee was liable to deduct - in favour of Revenue for statistical purposes. - I.T.A. No. 5125/Del/2011 - - - Dated:- 19-10-2012 - SHRI U.B.S. BEDI, AND SHRI SHAMIM YAHYA, JJ. Assessee by : Sh. Sunil Arora, CA Department by : Mrs. Shumana Sen, Sr. D.R. ORDER PER SHAMIM YAHYA: AM This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals), Rohtak dated 15.9.2011 pertaining to assessment year 2008-09. 2. The grounds raised read as under:- i) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of B.T. Steel relied by your good-self is distinguishable on fact. First of all the Hon ble Court held that difference in the statement of value of stock furnished to the bank and entries in the books of account, justifies addition, is a question of fact in each individual case. Second the addition by Assessing Officer was made on the basis the stock was physically verified by the Regional Manager by visiting the assessee premises. As stated above the assessee is proprietor of both firms, Xclusif Shoppee and Dua Distribution and the nature of business of the firms is same. The stock of Dua Distribution belongs to the assessee. The balance sheet submitted the return of income is consolidated balance sheet of both the firms and the amount closing stock is Rs. 23,40,391/- and the same is hypothecated by bank, whereas in the notice the amount is mentioned only Rs. 1767341/- which is factually is not correct. Although, the stock statement submitted to the bank as stated above is never been prepared properly but only on estimated basis to avail the maximum credit and the valuation is made on dealer price not on the basis of cost or market value which ever is less. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts. Hence, he allowed the issue in favour of the assessee and deleted the addition. 5. Against the above order the Revenue is in appeal before us. 6. We have heard the rival contentions in light of the material produced and precedent relied upon. 6.1 Ld. Departmental Representative submitted that Ld. Commissioner of Income Tax (A) has erred in deleting the addition. She claimed that addition was correctly made by the Assessing Officer. She also relied upon the case law referred by the Assessing Officer. She further placed reliance upon the decision of the Hon ble Karnataka High Court in the case of Recon Machine Tools (P) Ltd. vs. C.I.T. in I.T.A. No. 99 of 2000 vide order dated 30.5.2006. In this case Assessing Officer had made the addition in light of variation in closing stock declared by the assessee in its return of income and stock statement given to bank as on last date of accounting year. The Ld. Commissioner of Income Tax (A) and Tribunal had upheld the order of the Assessing Officer. It was held by the Hon ble High Court that in the absence of acceptable evidence to disbelieve bank statement, findings of the authorities were to be sustained. 6.2 Ld. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proposition that stock given to the bank cannot be given preference over the stock actually maintained by the assessee. It is a settled law that if two views are possible, the view in favour of the assessee has to be adopted. Under the circumstances, the addition based on stock statement submitted to Bank is not sustainable. Under the circumstances, in view of the discussions and precedents cited above, we are of the opinion that there is no infirmity in the order of the Ld. Commissioner of Income Tax (A) and accordingly, we uphold the same. 8. Apropos issue of addition on account of non-deduction of tax u/s. 194H Assessing Officer noted that assessee has debited a sum of Rs. 2,81,453/- on account of discount paid to the customers. Assessing Officer asked the assessee to explain as to why addition of Rs. 2,81,453/- may not be made to the taxable income, in view of the decision of the Hon ble High Court of Kerala in the case of Vodafone Essar Cellular vs. ACIT in I.T.A. No. 1742 dated 17.8.2010. Assessee submitted as under:- The discount of Rs. 281,453/- debited in the P L pertains only to the sale of hand sets not on the recharge coupons, thus the judgement of Vodafone as re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge coupons. Therefore, he held that the case law relied upon by the Assessing Officer was distinguishable on facts. Ld. Commissioner of Income Tax (A) concluded that the discount given to the dealers does not amount to commission and therefore the provisions of section 194H and section 40A(ia) are not attracted. 10. Against the above order the Revenue is in appeal before us. 11. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that the Hon ble High Court of Kerala in the case of M/s Vodafone Essar Cellular Ltd. vs. ACIT 194 Taxman 518(Ker.) has held as under:- Section 194H of the Income Tax Act, 1961 Deduction of tax at source Commission or brokerage etc. Assessment years 2004-05 to 2007-08 Whether discount given by assessee, a mobile cellular operator, to distributors in the course of selling of sim cards and recharge coupons under prepaid scheme of getting a connection, is, in substance, a payment for services to be rendered by distributors to assessee and, so much so, it would fall within definition of commission or brokerage under section 194H Held, yes. 11.1 We find that in view of the above exposi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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