TMI Blog2018 (5) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME Court] wherein it is held that if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted. Hence assessee cannot be deemed to be an ‘assessee-in-default’ on discount/commission of sale of prepaid sim cards. Therefore, Ground No. 2 of the assessee’s appeal is allowed. TDS on roaming charges - TDS u/s 194J - held that:- in absence of any human intervention during the actual roaming process, payment would not be Fees for Technical services as per the decisions of the various High Court and the Apex Court in case of CIT vs. Bharati Cellular[2010 (8) TMI 332 - Supreme Court of India]. Thus, payment made to other tel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on transfer of talk-time or sale of these items to the distributors is treated as commission on which the deductor assessee was liable to deduct tax at source u/s 194H of the Income Tax Act, 1961 which the assessee failed to do so. Therefore, the Assessing Officer held that the assessee is deemed to be an assessee in default u/s 201(1) for an amount of ₹ 1,97,05,130/- and consequential interest thereon amounting to ₹ 47,29,231/- u/s 201(1A) of the Act for assessee s failure to tax deduct at source on the commission payment of ₹ 19,70,51,298/- under the provisions of Section 194H of the Act. Further the assessee vide letter dated 12.03.2012 also asked to furnish complete details of payments of Roaming charges made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of Revenue s appeal the Ld. DR submitted that the CIT(A) erred in relying upon the decision of the Hon ble Supreme Court in the case of Hindustan Coca Cola Beverage Pvt. Ltd. and holding that the payee had included the receipts from assessee in its return of income, and the assessee company could not be treated as assessee in default in view of the provisions of section 191 of the Act. The CIT(A) has not appreciated the observations made by the Assessing Officer in treating the assessee as assessee in default, since the provision to section 201 of the Act has been incorporated prospectively w.e.f. 01.07.2012. The Ld. DR further submitted that the CIT(A) was not correct in directing the Assessing Officer to delete the liability of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Rajasthan High Court decided this issue in favour of the assessee. Thus, the Ld. AR submitted that Hon ble Karnataka High Court considered the decision of the Hon ble Delhi High Court delivered in assessee s own case. The Ld. AR submitted that the order u/s 201 of the Act was passed by ITO TDS, Rohtak and thus, the Punjab and Haryana High Court has necessary jurisdiction. The Ld. AR relied upon the decision of the Hon ble Supreme Court in case of CIT vs. Vegetable Products Ltd. 88 ITR 192 wherein it is held that if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted. Thus the Ld. AR submitted that in absence of any decision of the Jurisdictional Punjab and Haryan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision are possible that construction which favours the assessee must be adopted. In absence of any decision of the Hon ble Punjab and Haryana High Court as well as the Hon ble Allahabad High Court on this issue and in view of conflicting decisions of other High Courts, following the ratio of the Hon ble Apex Court, the view favourable to assessee is upheld. Hence assessee cannot be deemed to be an assessee-in-default on discount/commission of sale of prepaid sim cards. Therefore, Ground No. 2 of the assessee s appeal is allowed. 8. Now we come to the assessee s appeal. The Ld. AR submitted that the Ground No. I for A.Y. 2010-11 in assessee s appeal is not pressed. Therefore, the same is dismissed. As relates to Ground No. II and III fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot technical services u/s 194J or u/s 9(1)(vii). Only payments for services which are specialized, exclusive and customized to user/consumer qualify as fees for technical services in terms of Explanation 2 to Section 9(1)(vii) so as to attract TDS u/s 194J. The Ld. AR also relied upon the decision of the Hon ble Apex Court in case of CIT (TDS) vs. Delhi Transco Ltd. 380 ITR 398 wherein it has confirmed the Hon ble Delhi High Court decision that payment towards wheeling charges was not taxable as Fees for Technical Services u/s 194J of the Act. It was held that payment was towards transportation of electricity and nothing more and thus, the process was automatic through network/equipment without any human intervention. The Ld. AR also re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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