TMI Blog2013 (12) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... le to tax deduction at source under Section 194H- It does not amount to 'sale' of goods as unsold SIM cards are to be returned to the assessee and it is required to make payment against them. This is an antithesis of 'sale' – Decided against assessee. Levy of interest u/s 201(1A) – The assessee has not provided the details of recipients and the particulars of payment of taxes by them - Held that:- Following Ramakrishna Vedantha Math v ITO [2012 (8) TMI 128 - ITAT, KOLKATA] - When the Assessee furnishes lawfully maintained information about the recipients, the AO should first ascertain the related facts about payment of taxes directly by the recipients – Following Hindustan Coca Cola beverages Ltd v CIT [2007 (8) TMI 12 - SUPREME COURT OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no finding by the learned TDS Officer as to the failure of deductees to pay the liability." 4. The assessee filed petition for admission of the said additional ground and it was submitted at the time of hearing before us that the assessee had already raised in original Ground No. II/3 that the assessee should not be treated as assessee in default. However, as the ground was very broad, a more specific ground on jurisdiction of the TDS officer to treat the assessee as an 'assessee in default', has been filed by way of the additional ground (supra). 5. We have gone through the petition for admission of additional ground, which is a legal ground and the Department has not raised any objection to admit the additional ground(supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment or by book entry. 7. In prepaid mobile services, the assessee is delivering starter kits, starter packs, sim cards, recharge vouchers, electronical recharge, etc. of fixed denomination coupled with specific air time duration to the consumer at large. The consumers pay in advance and use Starter kits, recharge vouchers, etc. by activating their mobile connection provided by the assessee company. As in the case of post-paid services, in this segment also the assessee company is appointing State-wide Distributors for identifying the customers and distributing the prepaid products to the consumers. 8. The distinction in the assessee's case is that the consumers are paying in advance to the distributors as well as the distributors are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price is the remuneration of the distributors in this chain of transactions. This remuneration is, however treated by the assessee-deductor as 'cash discount' in its books of account and no TDS is being made by the assessee-deductor on these payments. 10. The AO sought to levy tax under sec 201(1) and the consequential interest u/s 201(1A) for not deducting tax at source in respect of the so called cash discount which according to him is nothing but commission offered to dealers and hence attracts the provision of 194H for deduction of tax at source. The AO rejected various argument of the Assessee and levied tax u/s 201(1) of Rs. 77,20,255/- and interest u/s 201(1A) of Rs. 30,18,510/-. 11. Aggrieved the Assessee preferred an appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shan Ltd. Vs. DCIT, [2012] 21 Taxman 489 (All.) The learned DR relied on the decision of CIT(A). 14. We have heard both the Parties and perused the record as well as gone through the orders of the authorities below. The main issue regarding payment to the agents for sale of SIM etc is now decided by three High Court decisions. CIT v Idea Cellular Ltd 325 ITR 148 Del Vodafone Essar Cellular Ltd v ACIT. 332 ITR 255 Ker. Bharti Cellular v ACIT 244 CTR 185 Cal. 15. The Delhi High Court in the case of Idea Cellular Ltd supra held as under:- "Assessee, a cellular operator, provides prepaid connections to the subscribers through distributors called prepaid market associates (PMAs) appointed by it. It offers discount for prepaid calling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly following the decision of the three high courts referred to above, we dismiss the appeal of the Assessee in so far as the applicability of provisions of sec 194H in respect of amounts paid to the agents in connection with sale of SIM cards and other services. Hence we proceed to decide the alternate ground. 17. The additional ground raised by the assessee is that if the recipient had paid the taxes on the amount of commission received the Assessee should no longer be treated as an assessee in default is well founded. This claim is supported by the decision of the Apex Court in the case of Hindustan Coca Cola beverages Ltd v CIT (293 ITR 226). However, as held by the Apex Court, this will not relieve the Assessee from payment of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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