Case Law Details
ACIT Vs Vodafone South Ltd (ITAT Chennai)
The issue under consideration is whether TDS u/s 194H is applicable on discounts allowed for prepaid SIM Cards/ Talktime as distributor margin?
ITAT is of the considered opinion that the sale of SIM cards/recharge coupons at discounted rate to distributors is not commission and therefore not liable to TDS under section 194H of the Act. However, they find that while deciding similar issue, the Hon’ble Kerala High Court has taken a different view, which is decided the issue against the assessee. Since there exist two contradictory decisions, ITAT are of the opinion that the law laid down by the Hon’ble Supreme Court in the case of CIT v. Vegetable Products Ltd. 88 ITR 192, which says that if a statutory provision is capable of more than one view, then the view which favours the tax payer should be preferred, hence ITAT decide the issue in favour of the assessee. Therefore, No TDS u/s 194H is applicable on discounts allowed for prepaid SIM Cards/ Talktime as distributor margin.
However, in the orders of authorities below, there was no elaborate discussion with regard to the sale discount offered by the assessee and maintained in the books of accounts of the assessee. Accordingly, ITAT remit the matter back to the file of the Assessing Officer only to find out as to how the books are maintained and how the sale price and the sale discount is treated and whether the sale discount is reflected in the books of the assessee or not. Hence, for limited purpose to verify the books, as observed hereinabove, the appeal filed by the assessee is allowed for statistical purposes.
FULL TEXT OF THE ITAT JUDGEMENT
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