DCIT (TDS), JAIPUR vs. BHARTI HEXACOM LIMITED, JAIPUR

PER SHRI KUL BHARAT, J.M.

This appeal by the Revenue is directed against the order of Ld. CIT (A)-III,

Jaipur dated 19.08.2016 pertaining to Assessment Year 2014-15.

The Revenue has raised the following grounds of appeal:-

“1. On the facts and in the circumstances of the case, whether the assessee is liable to deduct TDS u/s 194H of the I.T. Act, 1961 as the relation between assessee and distributor is that of principal to agent.

assessee has not deducted tax u/s 194H of the Act in respect of commission paid to

its distributors, passed order u/s 201(1)/201(1A) of the Act. Before the Assessing

2 ITA No. 952/JP/2016. M/s Bharti Hexacom Limited, Jaipur.

Officer, it was contended that the issue has been decided by the Tribunal. However,

the Assessing Officer without following the order of the Tribunal observed as under:-

“One of the other contentions of the assessee is that Ld. ITAT, Jaipur has also provided relief to the assessee in its decision dated 22.5.2015 (ITA no. 656/JP/2010) and has ruled that TDS is not applicable on discount allowed to prepaid distributors. The assessee has also contended that Ld CIT (A), Jaipur has also given relief to the assessee for AY's 2010-11 to 2013-14. In this regard, it is stated that these decisions of higher courts have not been accepted by the department and have been contested before Rajasthan High court and ITAT Jaipur respectively. Hence, this issue is currently sub-judice in nature.”

Aggrieved by this, the Assessee preferred an appeal before Ld. CIT(A), who after

considering the submissions, held that the assessee is not liable to deduct the tax

u/s 194H of the Act.

decided by the Hon’ble Jurisdictional High Court in assessee’s own case in DB

Income-tax Appeal Nos. 96/2016, 97/2016 & 98/2016 in favour of the assessee. He

drew our attention to Page No.132 of the Judgment of the Hon’ble Jurisdictional

High Court.

authorities below.

3 ITA No. 952/JP/2016. M/s Bharti Hexacom Limited, Jaipur.

record. The Ld. CIT(A) has decided this issue in para 4.4 of the impugned order as

under:-

“4.4 Respectfully following the above orders of Hon'ble ITAT, Jaipur, from A.Y. 2009-10 to 2013-14. I hold that no tax is required to be deducted u/s 194H in respect of difference between the price at which the prepaid card is sold to the distributor and the price at which the end customer buys and consequently the demand raised u/s 201(1) and interest u/s 201(1A) is deleted. In the result, all these grounds of appeal are allowed.”

Further, the Hon’ble Jurisdictional High Court in assessee’s own case in DB Income

Tax Appeal in the case of Commissioner of Income Tax (TDS) Jaipur vs.

M/s Bharti Hexacom Limited K-21 Malviya Marg, C-Scheme, Jaipur as

under:-

“M/s Bharti Hexacom Ltd. 52. Regarding the other appeals of Cellular Companies the questions are required to be answered as discussed hereinabove. The relationship is not of agent. It is principal to principal basis. The payment is received by the company and the amount of commission is never paid to the agent or the Distributor. Therefore, no TDS is required to be deducted. We also accept the contention raised by Mr. Jhanwar that even otherwise in view of divergent judicial views, one in favour of the assessee is required to be adopted as per settled law. Taking into consideration the above conclusion, the first issue is required to be answered in favour of assessee.”

4 ITA No. 952/JP/2016. M/s Bharti Hexacom Limited, Jaipur.

Respectfully following the judgment of the Hon’ble Jurisdictional High Court (Supra).

We do not see any reason to interfere into the order of Ld. CIT(A), same is hereby

affirmed. Thus, ground raised in this appeal is dismissed.

Sd/- Sd/- ( HkkxpUn] ½ ( dqy Hkkjr) (BHAG CHAND ) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 06/10/2017. Pooja आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

5 ITA No. 952/JP/2016. M/s Bharti Hexacom Limited, Jaipur.