Itxa 1129-17.Doc v. Itxa 1129-17.Doc

DDR IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1129 OF 2017 The Commissioner of Income-tax (TDS), Pune ..Appellantvs.M/s. Idea Cellular Ltd. ..Respondent ..Respondent …........ Mr. Sham Walve for appellant.Mr. Jehangir Mistri, Senior Counsel a/w. Mr. Atul Jasani forrespondent. …........ CORAM : NITIN JAMDAR & M.S.KARNIK, JJ. DATE : 13 JANUARY 2020 P.C.:- Heard learned counsel for the parties. 2.The Appellant-Revenue challenges the order dated 4January 2017 passed by the Income Tax Appellate Tribunal inIncome Tax Appeal No.1041, 1042 and 1953 to 1955/PUN/2013. 3.This Appeal pertains to the Assessment Year is 2010-11. 4.The Appellant-Revenue has raised the following questionsas a substantial questions of law :- “(a)Whether on the facts and circumstances of the case and in law, the Hon’ble Income Tax Appellate Tribunal erred in holding the discount given by the assessee to its distributors on prepaid SIM Cards does not require deduction of tax under Section 194H of the Income Tax Act ?and in law, the Hon’ble Income Tax Appellate Tribunal erred in holding the discount given by the assessee to its distributors on prepaid SIM Cards does not require deduction of tax under Section 194H of the Income Tax Act ? (b)Whether on the facts and in the circumstances of the case and in law, the Hon’ble Income Tax Appellate Tribunal erred in setting aside the case to the Assessing Officer ?”case and in law, the Hon’ble Income Tax Appellate Tribunal erred in setting aside the case to the Assessing Officer ?” 5.The Tribunal noted the observations of the AssessingOfficer that the discount allowed to the distributors by theRespondent – assessee company is on account of principal toprincipal relationship and not that of principal to agent. TheTribunal followed the decision of the Karnataka High Court in thecase of Bharati Airtel Ltd. vs. DCIT [372 ITR 33] and held thatthe sale of SIM cards/recharge coupons at discounted rate to thedistributors was not commission and therefore not liable to deductthe TDS under Section 194H. The Tribunal noted that there wasno decision of this Court on this issue on that date. 6.Learned counsel for the parties have tendered the copy ofthe order passed in Income Tax Appeal No. 702 of 2017subsequently in the case of Pr. Commissioner of Income Tax-8 vs.M/s. Reliance Communications Infrastructure Ltd., where sameissue arose for the consideration of this Court. The Division Bench 40. itxa 1129-17.doc of this Court while holding against the Appellant – Revenueobserved thus :- “3.Having heard the learned Counsel for the parties andhaving perused the documents on record, we do not findany error in the view of the Tribunal. The Tribunal, asnoted, besides holding that the Commissioner’s ordersetting aside the order passed under Section 201 was notcarried in appeal, had also independently examined thenature of the transaction and come to the conclusion thatwhen the transaction was between two persons on principalto principal basis, deduction of tax at source as per section194H of the Act, would not be made since the payment wasnot for commission or brokerage.” 7.In view of the finding of fact rendered by the Tribunalwhich we have noted above, the same principle would apply in thepresent case. Therefore, the questions of law as proposed do notgive any rise to substantial question of law. The Appeal is disposedof. (M.S.KARNIK, J.) (NITIN JAMDAR, J.) DikshaRaneDigitally signed byDiksha RaneDate: 2020.01.1517:13:37 +0530