Case Law Details
DCIT Vs M/s. Creative Technotex (P.) Ltd. (ITAT Kolkata)
Assessee contended that during the year commission was paid to the parties and incentive was also paid to several persons, who physically collect the money from different places as per the direction of the team employed. According to the assessee, this is not commission but incentive on collection of money from different places by various persons as per the direction of the team employed by the assessee company. This incentive includes travelling allowance also. We find that this incentive is not given at a fixed rate for payments which is known in the trade as incentive for actual collection and this incentive is in the nature of discount and not commission. Once this is in the nature of discount or can be called as incentive but not commission then the assessee is not liable to deduct TDS on this and accordingly we direct the AO to delete the disallowance under Section 40(a)(ia).This issue of the assessee’s appeal is allowed.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the Revenue against the order dated 12.08.2016 passed by CIT(A)-4, Kolkata for AY 2012-13.
2. The only issue is to be decided as to whether CIT(A) is justified in confirming the addition made by the AO on account of non-deduction of TDS invoking the provisions u/s 40(a)(ia) of the Income Tax Act, 1961 (in short “Act”).
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