Case Law Details
Nabirul Islam Vs DCIT (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT) Kolkata has passed a ruling in Nabirul Islam Vs DCIT that is set to have wide-ranging implications for the telecom industry. The tribunal has decided that Tax Deducted at Source (TDS) is not applicable on discounts given by dealers or distributors to retailers on the sale of prepaid SIM cards and mobile recharge cards.
The Core Issue: TDS on Discounts
The main contention in the appeal was about the applicability of TDS under Section 194 of the Income Tax Act on discounts provided by distributors to retailers for prepaid SIM cards and mobile recharge cards. The lower authorities had disallowed the deductions under Section 40(a)(ia) due to non-deduction of TDS, prompting the assessee to appeal.
Relying on Past Decisions: Bombay High Court’s Ruling
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