Case Law Details
CIT (TDS) Vs Vodafone Cellular Ltd. (Bombay High Court)
Whether provisions of Section 194H of the Income Tax Act, 1961 will be applicable in case of discounts given by the assessee to the distributors on account of prepaid SIM cards.
Section 194H of the Act deals with commission or brokerage. It says that any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five percent.
In Pr. Commissioner of Income Tax-8, Mumbai v/s. M/s. Reliance Communications Infrastructure Ltd. – Income Tax Appeal No. 702 of 2017 decided on 22.07.2019, this Court held that when transaction is between two persons on principal to principal basis, deduction of tax at source as per Section 194H of the Act would not be made since the payment was not for commission or for brokerage.
The above view has been followed by this Court in Income Tax Appeal No. 1129 of 2017- Commissioner of Income Tax (TDS) Pune V/s. M/s. IDEA Cellular Ltd., decided on 13.01.2020.
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