TMI Blog2019 (1) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... ll other parties being distributor, dealers and retailers are receiving the commission from Idea Cellular Limited. It is only for the sake of completeness of the entries in the books, the commission is rooted through the assessee’s books of account. Appellant is not liable to deduct the tax at source. - Decided in favour of assessee. - ITA No. 1029/JP/2018 - - - Dated:- 20-12-2018 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Mahendra Gargieya Shri Devang Gargieya (Adv) For the Revenue : Shri Ashok Khanna (JCIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 02/07/2018 of ld. CIT (A)-3, Jaipur for the A.Y. 2014-14. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ₹ 16,03,103/- which has been received from the principal, Idea Cellular Limited. The assessee has also accounted other expenses in the P L account which includes commission of ₹ 7,04,430/- paid to the retailers/dealers. The Assessing Officer held that the payment of commissioner of the retailers/dealers was liable to TDS U/s 194H of the Income Tax Act, 1961 (in short the Act), however, the assessee has not made the deduction of TDS in respect of the payment of the said amount to the retailers/dealers. Accordingly, the Assessing Officer invoked the provisions of Section 40(a)(ia) of the Act and disallowed the claim of deduction of ₹ 07,04,430/-. 3. On appeal, the ld. CIT(A) has dismissed the appeal of the assessee e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said commission. The assessee has shared the said commission with the dealers/retailers to the tune of ₹ 7,04,430/-, thus the Assessing Officer has not disputed the fact of commission received by the assessee was shared with the dealers/retailers as per the agreement between the Idea Cellular Limited and the assessee as well as the dealers/retailers. It is also not in dispute that the amount of total commission of ₹ 16,03,103/- has already suffered TDS at the time of payment. Thus, it is not a commission payment by the assessee in the capacity of principal to the retailers/dealers as an agent of the assessee but the commission is originally paid by the Idea Cellular Limited who is acting as a principal and all other parties bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 24,80,718/-. The assessee was liable to deduct TDS on the payment of commission made by him. Therefore, there would be no double deduction on payment of commission. Moreover, the argument of the assessee that if the assessee and the principal telecom company was to deduct TDS of the retailers on the same amount then it would be deemed to be double income received in the hands of the retailers whereas the income is only received once and hence it would lead to an absurd proposition. This argument of the assessee has no force. The telecom companies were not under any legal obligation to deduct TDS on payment to the retailers as they have paid commission only to the assessee. Further, the assessee has for his own convenience allowed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enterprises ITA No. 821/JP/2016 held that:- it is service provider who is responsible for paying the said commission and therefore, the provisions of section 194H are not attracted against the distributor. Accordingly, when the assessee is not directly and indirectly in deciding the quantum of alleged commission / discount as well as determining the retail price at which the recharge coupons is sold to the customer then the provisions of section 194H cannot be applied on the assessee. Consequently, disallowance made by the AO u/s 40(a)(ia) is deleted. The service provider may be any one whether it is BSNL or Idea, etc. and the position of the assessee is also of an intrmediatory who is not responsible for making payment to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to delete the addition of ₹ 815665/-. This ground is allowed. The facts of this assessment year are totally similar. Therefore following the above decision I am the view that appellant is not liable to deduct the tax at source. Therefore the action of the Assessing officer is not as per law to disallow of ₹ 16,00,697/- u/s 40(a)(ia) of the I.T. Act. Hence I direct the Assessing officer to delete the addition of ₹ 16,00,697/-. This ground is allowed. Similarly for the A.Y. 2013-14, the issue was decided by the ld. CIT(A) in favour of the assessee. Once the issue was decided in favour of the assessee in the earlier assessment years then even if there was no appearance on behalf of the assessee, the ld. CIT(A) was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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