Income Tax Appellate Tribunal (ITAT), Raipur bench consisting ofRavish Sood, Judicial Member and Jamlappa D Battull, Accountant Member held that no TDS on Discounts extended to Pre-paid SIM distributors on transfer of pre-paid SIM cards/talk time.
The appeal is filed by the assessee,Amit Kumar Shivhare, Prop. M/s. Amit Infotech, against the order passed by the Commissioner of Income Tax (CIT), which in turn arose from the order passed by the Assessing Officer (AO) under Sec. 143(3) and 263(1) of the Income Tax Act, 1961 for the assessment year 2008-09. The main ground for appeal is regarding the sustainability of the disallowance u/s. 40(a)(ia) of the Act of the recharge commission of Rs.4,87,299/- made by the Assessing Officer, for the reason that the assessee had failed to deduct tax at source on the same. After disallowing the aforesaid amount, the Assessing Officer determined the income of the assessee at Rs.7,77,230/. Aggrieved, the assessee carried the matter in appeal before the CIT but went in vain hence the assessee approached the Tribunal.
The Counsel for the Appellant, G.S. Agrawal submitted that that the amount in question, i.e., the impugned recharge commission of Rs. 4,87,299/- was not liable for deduction of tax at source u/s.194H of the Act.
The Tribunal said”that as the assessee had merely facilitated the passing over the retailer’s discounts that were received by him from the company, i.e, M/s Idea Cellular Ltd. to the retailers, therefore, the same, though wrongly categorized by him under the head “recharge commission” were not liable for deduction of tax at source u/s. 194H of the Act and tax withholding provisions under section 194H would not be applicable to discounts extended to pre-paid SIM distributors on transfer of pre-paid SIM cards/talk time.”
Comments