TMI Blog2018 (6) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... s given to the distributors on the sale of the prepaid starter kits/sim cards, no disallowance u/s 40(a)(ia) was called for in the hands of the assessee - Decided against the revenue. - ITA No.3857/Mum/2016 - - - Dated:- 8-6-2018 - SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM For The Revenue : Shri B. Sriniwas, D.R For The Assessee : Shri Sanjay Chopra, A.R ORDER PER RAVISH SOOD, JUDICIAL MEMBER: The present appeal filed by the revenue is directed against the order passed by the CIT(A)-14, Mumbai dated 04.03.2016, which in itself arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short Act ), dated 21.03.2014. The revenue assailing the order of the CIT(A) had ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 66,03,56,590/- to its prepaid distributors for selling of its prepaid recharge vouchers and starter kits, but no TDS was deducted on the said discounts. The AO being of the view that as the discount on sale of SIM/RCV were in the nature of commission, hence the assessee was liable to deduct tax at source on the same under Sec.194H of the Act. The explanation of the assessee that as its relation with the distributors was on a principal-to-principal basis, thus the discount given to the distributors constituted the latters margin and could not be held to be commission or brokerage liable for deduction of tax at source under Sec. 194H of the Act, however did not find favour with the AO. The A.O holding a conviction that as the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the issue involved in the present case was squarely covered by a consolidate order passed in the assessee s own case by a coordinate bench of the Tribunal viz. ITAT D Bench, Mumbai in M/s Tata Tele Services (Maharashtra) Ltd. Vs. ACIT, TDS-3(1), Mumbai, (ITA No. 2043-2046/Mum/2014) for A.Ys 2009-10 to 2012-13. It was submitted by the ld. A.R that the Tribunal in its aforesaid order, while disposing off the appeals of the assessee (including that for the year under consideration i.e. A.Y 2011-12) followed the judgment of the Hon ble High Court of Karnataka in Bharti Airtel Ltd. and Ors. Vs. DCIT (ITA Nos. 637 644 of 2013, dated 14.08.2014) and had concluded that as the sale of starter kits/sim cards was purely a purchase/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, the distributor can charge over and above the MRP. For example, if the MRP of the starter kit is ₹ 100, the assessee sells it to the distributor at ₹ 80 and the distributor can sell it to the retailer or customer for a price ranging from ₹ 80 to ₹ 100. However, as far as the assessee is concerned, it raises the invoice for 80 only to the distributer and also the same amount is reflected in the books of account towards the sale price. The assessee never credits the amount of ₹ 100 towards the sale price and allows discount of ₹ 20 in its books of account. Thus, as far as the assessee is concerned, sale price of the starter kit /sim card is ₹ 80. Furthermore, as per the terms and conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai, Vs. ACIT-TDS-3(1), Mumbai (ITA No. 2043 to 2046/Mum/2014; dated 27.05.2016) for A.Ys 2009-10 to 201213. We are of the considered view that the Tribunal had after deliberating at length on the issue as to whether the assessee remained under any statutory obligation to deduct tax at source on the discounts allowed to the distributors on the sale of starter kits/pre-paid sim cards and recharge vouchers, had answered in the negative, and concluded that as the assessee remained under no obligation to deduct tax at source on the said discounts, thus it could not be held as being in default under Sec. 201(1) and 201(1A) of the Act. We find ourselves to be in agreement with the view taken by the Tribunal that as the sale of starter kits/sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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