Itta/181/2022 Of Vodafone Idea Limited v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT AT HYDERABAD NIONDAY ,THE EIGHTH TWO THOUSAND AND PRESENT THE HON'BLE SRI JUSTICE [P.SAM KOSHY]ANDTHE HON'BLE SRI JUSTICE [N.TUKARAMJI] INCOME TAX TRIBUNAL APPEAL [N][O:181 ] [2022] Appeal under Section [260A ][of ][the ][lncome Tax ][Act, ]['1961 ][against]order dated 23-12-2021 in [ITA No. ][85lHydt202o ][on the ][file of ][the ][lncome ][Tax]Bench [at Hyderabad ][preferred against ][the ][order ][dated ][7-]Appellate Tribunal ["8" ]11-2019 in ITA Nos. 10601 & [10602 ][tClT ][(A) ][-8tHydl2014-15 ][on the file of ][the]commissioner of lncome [Tax ][( ][Appeals ]) [8, ][Hyderabad ][preferred ][against the]order of the Assistant commissioner [of ][lncome ][Tax, Circle 14 ][(2) ][(llc)]Hyderabad dated 7-3-2014 [in ] [No. ][HYD1009'16G] Between: Vodafone ldea Limited, [(Formerly ldea Cellular ][Limlte!! ]]"d ll-o^ol^Y11'I [Towers ][- ][ll]S"grr"p"t Hyderzibad -'500 [O16TAN. HYDl00916G PAN. AAAC82'100P] ...APPELLANT ANDThe Deputy Commissioner of [lncome Tax, Circle 14(2)' Hyderabad]Counsel for the Appellant: [SRl. M. NAGA DEEPAK]Counsel forthe Respondent: The Court made the following [ORDER:] ...RESPONDENT t-tii"t]g THE HON,BLE [P.SAM ] ANDTHE HON'BLE [JUSTICE N.TUKARAMJI] I.T.T.A.[No.181][oF ][2022] ORDER:per [rfo ][n'ble ][Sn ][Justice ][P'SAM ][KosHy)] Heard Sri [M. ][Naga Deepak, ][learned counsel ][for ][appellant] Perused [the ][material ][available on record'] An identical identical [[issue has ][already been ][taken ][up ][by ][a ][Division]][[already been ][taken ][up ][by ][a ][Division]][[taken ][up ][by ][a ][Division]][[up ][by ][a ][Division]][[by ][a ][Division]][[a ][Division]][[Division]] 2. An identical identical [[issue has ][already been ][taken ][up ][by ][a ][Division]][[already been ][taken ][up ][by ][a ][Division]][[taken ][up ][by ][a ][Division]][[up ][by ][a ][Division]][[by ][a ][Division]][[a ][Division]][[Division]]Bench [of ][this ][Court ][in ][I'T'T'A'No'291 of ][2013 ][which ][stood ][decided]on 17 [.O7 ][.2013 ][in ][respect ][of ][the ][same ][assessee ][and ][the ][dispute ][in]the present [appeal also is ][the ][same'] Given the the [[fact ][that ][identical ]][[that ][identical ]][[identical ]][[issue ][already stands ][decided' ]][[already stands ][decided' ]][[decided' ]][[we]] 3. Given the the [[fact ][that ][identical ]][[that ][identical ]][[identical ]][[issue ][already stands ][decided' ]][[already stands ][decided' ]][[decided' ]][[we]]are of the [considered ][opinion ][that ][the ][instant I'T'T'A ][also ][is]squarely [covered ][and ][decided ][in ][the ][light ][of the ][decision ][of ][the]Division [Bench ][of ][this ][Court ][in ][I'T T'A'No'2O1 ][of ][2013'] Accordingly, [[the ][present ][appeal ][stands dismissed ][in ][terms of]][[present ][appeal ][stands dismissed ][in ][terms of]][[appeal ][stands dismissed ][in ][terms of]][[stands dismissed ][in ][terms of]][[in ][terms of]][[terms of]] 4. Accordingly, [[the ][present ][appeal ][stands dismissed ][in ][terms of]][[present ][appeal ][stands dismissed ][in ][terms of]][[appeal ][stands dismissed ][in ][terms of]][[stands dismissed ][in ][terms of]][[in ][terms of]][[terms of]]the order [of ][this ][Court ][rn ][I'T'T'A'No'291of ][2Ol3 ][dated 17'O7'2073'] l,earned counsel [[for the petitioner submitted ]][[that ][the ][order ][in]][[the ][order ][in]][[order ][in]][[in]] 5. l,earned counsel [[for the petitioner submitted ]][[that ][the ][order ][in]][[the ][order ][in]][[order ][in]][[in]]I.T.T.A.No.291 [of ][2O13 ][d'ated' ][77'O7'2O13 ][is ][challenged before ][the]Hon'lcle Supreme [Court ][and ][it ][is ][pending' ][Needless ][to ][say ][that ][the]decision [of ][this ][Court ][would ][be ][subject ][to ][the ][outcome ][of ][the ][order] e' l,earned counsel [[for the petitioner submitted ]][[that ][the ][order ][in]][[the ][order ][in]][[order ][in]][[in]] 5. l,earned counsel [[for the petitioner submitted ]][[that ][the ][order ][in]][[the ][order ][in]][[order ][in]][[in]]I.T.T.A.No.291 [of ][2O13 ][d'ated' ][77'O7'2O13 ][is ][challenged before ][the]Hon'lcle Supreme [Court ][and ][it ][is ][pending' ][Needless ][to ][say ][that ][the]decision [of ][this ][Court ][would ][be ][subject ][to ][the ][outcome ][of ][the ][order] e' to be passed by the Hon'ble Supreme Court. No costs.Miscellaneous Petitions pending if any shall stand closed. Sd/- C.V. MALLIKARJUNA VARMJOINT REGISTRR //TRUE COPYII SECTION OFFICER To 1. The lncome Tax Appellate Tribunal "B" Bench at Hyderabad 2. The Commissioner of lncome Tax ( Appeals ) 8, Hyderabad 3. Hydera The Assistant bad.Commissioner of lncome Tax, Circle 14 l2l lllcl ,4. One CC to SRl. M. NAGA DEEPAK, Advocate IOPUCI4. One CC to SRl. M. NAGA DEEPAK, Advocate IOPUCI 5. Two CD Copies Notc ( along with a copy of the order datcd 17 -07 [-2013 ]in ITTA No. 291 of 2013)kul ffi .tI TI HIGH COURTPSKJ & NTRJDATED:O8tO1l2O24 ORDER lTTA.No.181 of 2022 DISMISSING THE ITTA wr tHoul' cosl's l s1:\[,ZL\] f [574]15:4,^(J2 2 t4AH n21\a.\**{+sParc eEC rfi {II ,,C .J 't;.H{ ""1XJ{ -.:rd i THE HON'BLE THE CHIEF ANDTHE HON'BLE [Ms. ][JUSTICE G. ] LT.T.A. No.29'l o12013 DATED:17.7.2013 Between:IvUs. Vodalone [Essar South ][Ltd-,]Hyderabad.... AppellantAnd The Deputy Commissioner [of ][lncome Tax,]Hyderabad.... Respondent THE HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON'BLE Ms. JUSTICE G. ROHINI l.T.T.A.No.291 OF 2013 JUdgment: (per the Hon'ble the Chiel Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the [judgment ]and order ofthe learned Tribunal dated 31.1.2013 in relation to theassessment year 2007-08 and is sought to be admittedon the following suggested questions of law: a) Whether on the facts and circumstances of the case, theHon'ble Tribunal was right in upholding the orders of theauthorities below in treating the discount offered by theappellant to ils distributors as commission paid by theappellant ?Hon'ble Tribunal was right in upholding the orders of theauthorities below in treating the discount offered by theappellant to ils distributors as commission paid by theappellant ? b) Whether on the facts and circumstances of the case, theHon'ble Tribunal was right in confirming the orders of thelower authorities holding that lhe relationship betweenappellant and its distributors was not that ol a ['Principal ]toPrincipal', but only a Principal-Agent relationship ?Hon'ble Tribunal was right in confirming the orders of thelower authorities holding that lhe relationship betweenappellant and its distributors was not that ol a ['Principal ]toPrincipal', but only a Principal-Agent relationship ? c)Whether the Tribunal was right in confirming the ordersof lhe lower authorities that the discount otlered by theappellant on sale of Prepaid SIM cards and Rechargecoupons etc., would be a commission envisaged underSection 194H of the lncome Tax Act, 1961 ?of lhe lower authorities that the discount otlered by theappellant on sale of Prepaid SIM cards and Rechargecoupons etc., would be a commission envisaged underSection 194H of the lncome Tax Act, 1961 ? d) [Ierely because the appellant is a service provider, doesit necessarily mean that the relationship with its distributorwould always be on'Principal to Agent'basis ? Can it besaid that only in case of goods, there can either bePrincipal to Agent or Principal to Principal arrangement ?it necessarily mean that the relationship with its distributorwould always be on'Principal to Agent'basis ? Can it besaid that only in case of goods, there can either bePrincipal to Agent or Principal to Principal arrangement ? d) [Ierely because the appellant is a service provider, doesit necessarily mean that the relationship with its distributorwould always be on'Principal to Agent'basis ? Can it besaid that only in case of goods, there can either bePrincipal to Agent or Principal to Principal arrangement ?it necessarily mean that the relationship with its distributorwould always be on'Principal to Agent'basis ? Can it besaid that only in case of goods, there can either bePrincipal to Agent or Principal to Principal arrangement ? e)Whether the fact that the pre-paid distributor wasrequired to undertake activities such as pertormingsubscriber identification, doing documentation work andenrolling them as mobile subscribers would make lhepre-paid distributor an agent of the Petitioner ?required to undertake activities such as pertormingsubscriber identification, doing documentation work andenrolling them as mobile subscribers would make lhepre-paid distributor an agent of the Petitioner ? 0 Whether the fact that no such services relerred to abovewere rendered in relation to recharge coupons would nolimply that the relationship between the Petitioner and thepre-paid distributor is a Principal-Principal relationship asregards distribution of recharge coupons ?were rendered in relation to recharge coupons would nolimply that the relationship between the Petitioner and thepre-paid distributor is a Principal-Principal relationship asregards distribution of recharge coupons ? s)Whether the Tribunal was right in holding that the taxdeduction provisions can be applied to suchunascertained or indeterminable amounts keeping in viewthe un-workability of computation provisions in suchcases ?deduction provisions can be applied to suchunascertained or indeterminable amounts keeping in viewthe un-workability of computation provisions in suchcases ? h)Whether the Tribunal was right in holding that Section194H will apply to such cases where a person neithermakes any payment nor credits any sum to the accounlof anolher person ?194H will apply to such cases where a person neithermakes any payment nor credits any sum to the accounlof anolher person ? After reading the suggested questions of law, we are of theview that almost all the suggested questions relate to questionof fact, not law. ln any view of the matter, upon hearing thelearned counsel for the appellant and after going through theimpugned [judgment ]and order ol the learned Tribunal, the onlypoint that arises for consideration is whether allowing discountto the dealers on SIM Cards and re-charge coupons will attractthe provision for tax deducted at source under the Act or not.view that almost all the suggested questions relate to questionof fact, not law. ln any view of the matter, upon hearing thelearned counsel for the appellant and after going through theimpugned [judgment ]and order ol the learned Tribunal, the onlypoint that arises for consideration is whether allowing discountto the dealers on SIM Cards and re-charge coupons will attractthe provision for tax deducted at source under the Act or not. The learned Tribunal has followed the following decisionsof various High Courts, namely, C.l.T. vs. ldea Cellular Ltd.,reported in 325 ITR 148 DEL; Vodafone Essar Cellular Ltd.,vs. ACIT reported in 332 ITR 255 Kerala and Bharti Cellularvs. ACIT reported in 244 CTR 185 Cal. lt is recorded that the The learned Tribunal has followed the following decisionsof various High Courts, namely, C.l.T. vs. ldea Cellular Ltd.,reported in 325 ITR 148 DEL; Vodafone Essar Cellular Ltd.,vs. ACIT reported in 332 ITR 255 Kerala and Bharti Cellularvs. ACIT reported in 244 CTR 185 Cal. lt is recorded that the rdcts of the case in all those reported judgments are identical tothe facts of the present case. The learned Tribunal recordedthat the A.R. did not bring in any arguments to distinguish theabove cases in so far as similarity of facts and method ofaccounting are concerned. The learned Tribunal following thedecisions of the other High Courts referred to above, dismissedthe appeal and held that the provision of Section 194H isapplicable in respect of amounts paid to the agents inconnection with sale of SIM cards and other services isadaptable.above cases in so far as similarity of facts and method ofaccounting are concerned. The learned Tribunal following thedecisions of the other High Courts referred to above, dismissedthe appeal and held that the provision of Section 194H isapplicable in respect of amounts paid to the agents inconnection with sale of SIM cards and other services isadaptable. Hence, we do not find any illegality or infirmity in theimpugned [judgment ]and order of the Tribunal.impugned [judgment ]and order of the Tribunal. The appeal is accordingly dismissed. K.J. SENGUPTA, CJ G. ROHINI, J 17.O7.2013pnb r)