Assistant Commissioner of Income Tax (TDS) Circle-2(1), Bangalore V. M/s Idea Cellular Limited , Bangalore

ITA 2207/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4288 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RONAK G DOSHI
• Keywords: TDS
• Section: 11; 201(1); 205

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO S . 1942, 2206 & 2207 /BANG/201 8 FINANCIAL YEAR S : 20 1 1 - 1 2(3RD & 4TH QUARTERS) & 201 2 - 1 3 THE ASSISTANT COMMISSIONER OF INCOME-TAX (TDS), CIRCLE 2 (1), BANGALORE. VS. M/S. IDEA CELLULAR LTD., NO. 75, RICHMOND ROAD, BANGALORE 560 025. TAN: BLRM01952G APPELLANT RESPONDENT APPELLANT BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (DR) RESPONDENT BY : SHRI RONAK G. DOSHI, CA DATE OF HEARING : 0 6 .0 2 .2019 DATE OF PRONOUNCEMENT : 08 . 0 2 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE THREE APPEALS ARE FILED BY THE REVENUE WH ICH ARE DIRECTED AGAINST THREE SEPARATE ORDERS OF LD. CIT(A)-13, BANGALORE A LL DATED 14.03.2018. OUT OF THIS BUNCH OF THREE APPEALS OF REVENUE, TWO APPE ALS ARE FOR ASSESSMENT YEAR 2012-13 (QUARTER 3 & QUARTER 4) AND ONE APPEAL IS FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE REVENUE IN ITA NO. 194 2/BANG/2018 ARE AS UNDER. 1. THE ORDER OF THE LD. CIT(A) IS OPPOSED TO LAW & FACTS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN CANCELLING THE ORDER U/S. 201(1) & 201(1A) BY STATING THAT ONC E IT IS HELD THAT THE RIGHT TO SERVICE CAN BE SOLD THEN THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUTOR WOULD BE THAT OF 'PRINCIPAL AND PRINCIPAL' AND NOT OF 'PRINCIPAL AND AGENT.' 3. THE LD. CIT(A) HAS ERRED IN RELYING ON THE DECIS ION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF BHARTI AIRTEL L TD. (52 TAXMAN.COM 31) (2014) WHICH HAS NOT BEEN ACCEPTED B Y THE DEPARTMENT. ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 2 OF 8 FOR THESE AND GROUNDS THAT MAY BE RAISED DURING THE COURSE OF APPEAL AND ACTUAL HEARING, THE APPELLANT PRAYS THAT THE OR DER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY HE SET ASI DE AND CANCELLED. 3. THE GROUNDS RAISED BY THE REVENUE IN ITA NO. 220 6/BANG/2018 ARE AS UNDER. 1) THE ORDER OF THE LD. CIT(A) IS OPPOSED TO LAW & FACTS OF THE CASE. 2) THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN CANCELLING THE ORDER U/S. 201(1) & 201(1A) BY STATING THAT ONC E IT IS HELD THAT THE RIGHT TO SERVICE CAN BE SOLD THEN THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUTOR WOULD BE THAT OF 'PRINCIPAL AND PRINCIPAL' AND NOT OF 'PRINCIPAL AND AGENT. 3) THE LD. CIT(A) HAS ERRED IN RELYING ON THE DECIS ION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF BHARTI AIRTEL L TD. (52 TAXMAN.COM31)(2014) WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. FOR THESE AND GROUNDS THAT MAY BE RAISED DURING THE COURSE OF APPEAL AND ACTUAL HEARING, THE APPELLANT PRAYS THAT THE OR DER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASI DE AND CANCELLED. 4. THE GROUNDS RAISED BY THE REVENUE IN ITA NO. 220 7/BANG/2018 ARE AS UNDER. 1) THE ORDER OF THE LD. CIT(A) IS OPPOSED TO LAW & FACTS OF THE CASE. 2) THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS IN CANCELLING THE ORDER U/S. 201(1) & 201(1A) BY STATING THAT ONC E IT IS HELD THAT THE RIGHT TO SERVICE CAN BE SOLD THEN THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUTOR WOULD BE THAT OF 'PRINCIPAL AND PRINCIPAL' AND NOT OF 'PRINCIPAL AND AGENT.' 3) THE LD. CIT(A) HAS ERRED IN RELYING ON THE DECIS ION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF BHARTI AIRTEL L TD. (52 TAXMAN.COM 31)(2014) WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. FOR THESE AND GROUNDS THAT MAY BE RAISED DURING THE COURSE OF APPEAL AND ACTUAL HEARING, THE APPELLANT PRAYS THAT THE OR DER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASI DE AND CANCELLED. 5. THE LD. DR OF REVENUE SUPPORTED THE ORDER PASSED BY THE AO U/S. 201(1) AND 201(1A) OF IT ACT, 1961 FOR Q3 OF FINANCIAL YEA R 2011-12, FOR Q4 OF FINANCIAL YEAR 2011-12 AND FOR FINANCIAL YEAR 2012- 13. ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 3 OF 8 6. HE SUBMITTED THAT THIS IS TRUE THAT THERE IS TRI BUNAL ORDER IN ASSESSEES OWN CASE IN FAVOUR OF THE ASSESSEE, FOR ASSESSMENT YEAR S 2009-10 TO 2012-13 IN ITA NOS. 648 TO 651/BANG/2014 DATED 06.11.2015 C OPY AVAILABLE ON PAGES 88 TO 109 OF PAPER BOOK FILED BY THE ASSESSEE IN WHICH THE TRIBUNAL HAS FOLLOWED THE JUDGEMENT OF HON'BLE KARNATAKA HIG H COURT RENDERED IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT AS REPORTED IN [2015] 372 ITR 33 (KARNATAKA). HE PLACED RELIANCE ON A JUDGMENT OF H ON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF HUTCHISON TELECOM EAS T LTD. VS. CIT 375 ITR 566. HE SUBMITTED A COPY OF THIS JUDGEMENT OF HON BLE CALCUTTA HIGH COURT. HE SUBMITTED THAT HONBLE CALCUTTA HIGH COURT HAS A LSO CONSIDERED THE SAME JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT REND ERED IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA) AND HAS ALSO CO NSIDERED THE JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CI T VS. IDEA CELLULAR LTD. AS REPORTED IN (2010) 325 ITR 148 (DELHI). HE FURT HER POINTED OUT THAT IT IS NOTED BY HONBLE CALCUTTA HIGH COURT THAT HONBLE D ELHI HIGH COURT HAS CONSIDERED THE JUDGEMENT OF HONBLE KERALA HIGH COU RT RENDERED IN THE CASE OF CIT VS. DIRECTOR, PRASAR BHARTI AS REPORTED IN (2010) 325 ITR 205 (KERALA) AND ALSO ANOTHER JUDGEMENT OF HONBLE KERA LA HIGH COURT RENDERED IN THE CASE OF VODAFONE ESSAR CELLULAR LTD. VS. ACI T AS REPORTED IN (2011) 332 ITR 255 AND ALSO ANOTHER JUDGEMENT OF HONBLE C ALCUTTA HIGH COURT RENDERED IN THE CASE OF BHARTI CELLULAR LTD. VS. AC IT &ANR. AS REPORTED IN (2013) 354 ITR 507 (CAL) AND THE ISSUE WAS DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN PARTICULAR, O UR ATTENTION WAS DRAWN TO THE PARA ON THE LAST PAGE OF THIS JUDGEMENT OF HON BLE CALCUTTA HIGH COURT. IT WAS POINTED OUT THAT REGARDING THE JUDGEMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF BHARTI AIRTEL LTD. VS . DCIT (SUPRA), IT IS HELD BY HONBLE CALCUTTA HIGH COURT THAT THIS JUDGEMENT HAS NO ASSISTANCE BECAUSE IN THIS CASE, THE HON'BLE KARNATAKA HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON THIS BASIS THAT THE ASSES SEE AND SERVICE PROVIDER WERE ON THE PRINCIPAL TO PRINCIPAL BASIS. BUT AS P ER HON'BLE CALCUTTA HIGH COURT IN THAT CASE, THEIR LORDSHIPS WERE NOT PERSUA DED THAT THE DEALINGS AND TRANSACTIONS WERE BETWEEN ASSESSEE AND ITS SERVICE PROVIDER ON PRINCIPAL TO PRINCIPAL BASIS. HE SUBMITTED THAT THEREFORE, IN T HE PRESENT CASE, THE ISSUE ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 4 OF 8 SHOULD BE DECIDED INDEPENDENTLY WITHOUT FOLLOWING T HE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA) AND THE EARLIER TRIBUNAL ORDER. AT THIS JU NCTURE, THE BENCH POINTED OUT THAT IF THE LD. DR OF REVENUE CAN SHOW THAT THE FAC TS IN THE PRESENT CASE FOR THE PRESENT YEARS WHICH ARE BEFORE THE TRIBUNAL ARE IN LINE WITH THE FACTS IN THE CASE OF HUTCHISON TELECOM EAST LTD. VS. CIT (SU PRA) AND NOT IN LINE WITH THE FACTS IN ASSESSEES OWN CASE FOR EARLIER YEARS AND IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA), THEN ONLY WE CAN DECI DE THE ISSUE INDEPENDENTLY WITHOUT FOLLOWING THE EARLIER TRIBUNA L ORDER IN ASSESSEES OWN CASE AND BINDING JUDGEMENT OF HON'BLE KARNATAKA HIG H COURT RENDERED IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA). I N REPLY, THE LD. DR OF REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS IN PRESENT TWO YEARS AND IN EARLIER YEARS FOR WHICH THE TRIBUNAL ORDER IN AS SESSEES OWN CASE IS AVAILABLE AND IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA). 7. THE LD. AR OF ASSESSEE SUBMITTED THAT THERE IS N O DIFFERENCE IN FACTS IN THE PRESENT TWO YEARS AND THE EARLIER YEARS FOR WHICH T HE TRIBUNAL ORDER IN ASSESSEES OWN CASE IS AVAILABLE ON RECORD AND FACT S ARE SIMILAR TO THE FACTS IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA). HE ALSO SUBMITTED THAT THERE IS A LATER JUDGEMENT OF HONBLE RAJASTHAN HIG H COURT RENDERED IN ASSESSEES OWN CASE IN ITA NO. 90/2018 DATED 12.04. 2018 COPY AVAILABLE ON PAGES 82 TO 87 OF PAPER BOOK. HE ALSO PLACED RE LIANCE ON ANOTHER JUDGMENT OF HONBLE RAJASTHAN HIGH COURT RENDERED I N THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P.) LTD. AND OTHERS VS. CIT AS REPORTED IN [2018] 402 ITR 539 (RAJASTHAN), COPY AVAILABLE ON P AGES 22 TO 81 OF PAPER BOOK. HE POINTED OUT THAT IN THIS CASE, THE ASSESS EE WAS ALSO ONE OF THE PARTIES AND IN THIS REGARD, HE DRAWN OUR ATTENTION TO PAGE 14 OF THIS JUDGEMENT AND POINTED OUT THAT THIS IS NOTED BY HON BLE RAJASTHAN HIGH COURT THAT MR. AKHIL SIMLOTE APPEARED ON BEHALF OF THE ASSESSEE IDEA CELLULAR LTD. HE DRAWN OUR ATTENTION TO PAGE NO. 7 5 OF THE PAPER BOOK AND POINTED OUT THAT IN ITS JUDGEMENT DATED 11.07.2017 IN ASSESSEES OWN CASE AS CAN BE SEEN ON PAGE NO. 75 OF PAPER BOOK I.E. ON PAGE NO. 54 OF THE JUDGEMENT IN PARA 42 OF ITS JUDGEMENT, HONBLE RAJA STHAN HIGH COURT HAS CONSIDERED AND EXAMINED THE APPLICABILITY OF THE JU DGEMENT OF HONBLE ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 5 OF 8 CALCUTTA HIGH COURT RENDERED IN THE CASE OF HUTCHIS ON TELECOM EAST LTD. VS. CIT AS REPORTED IN [2015] 375 ITR 566 ON WHICH RELIANCE HAS BEEN PLACED BY LD. DR OF REVENUE. HE ALSO POINTED OUT T HAT IN PARA NOS. 58 TO 60 OF THIS JUDGEMENT, HONBLE RAJASTHAN HIGH COURT HAS NOTED THAT IN RESPECT OF ASSESSEE IDEA CELLULAR LTD., AGREEMENT WAS EXAMINED AND ISSUES WERE DECIDED IN FAVOUR OF THE ASSESSEE IN THE DEPARTMENT APPEALS. HE DRAWN OUR ATTENTION TO PARA 59 OF THE JUDGEMENT AND POINTED O UT THAT THIS IS ALSO NOTED BY HONBLE RAJASTHAN HIGH COURT THAT AS PER THE ARG UMENT OF LD. COUNSEL OF THE ASSESSEE, THE FINAL TAX IS PAID BY THE DISTRIBU TOR AND NOT BY THE AGENT AND THE REVENUE IS NOT AT LOSS IN ANY FORM. AT THI S JUNCTURE, THE BENCH WANTED TO SEE THE AGREEMENT OF THE ASSESSEE WITH TH E DISTRIBUTOR. IN REPLY, LD. AR OF ASSESSEE SUBMITTED THAT A SPECIMEN COPY O F DISTRIBUTORSHIP AGREEMENT WITH MOHIT ENTERPRISES IS AVAILABLE ON PA GES 1 TO 41 OF PAPER BOOK. HE POINTED OUT THAT AS PER PARA 4 OF THIS AG REEMENT IN RESPECT OF PAYMENTS, DISCOUNTS AND TAXES, IT HAS BEEN AGREED B ETWEEN THE PARTIES THAT THE DISTRIBUTOR HAS TO MAKE PAYMENT IN ADVANCE TO T HE ASSESSEE COMPANY TOWARDS THE VALUE OF THE AIRTIME PURCHASED THROUGH PRE-PAID SIM CARDS / RECHARGE VOUCHERS / V-TOP UP ETC. THE TRADE DISCOU NTS ARE TO BE OFFERED OR PAYMENTS TO BE MADE FOR THE ACTIVITIES UNDERTAKEN B Y THE DISTRIBUTOR PURSUANT TO THIS AGREEMENT SHALL BE DECIDED FROM TI ME TO TIME AS PER THE POLICY OF THE ASSESSEE COMPANY. THEREAFTER THE BEN CH POINTED OUT THAT AS PER PARA 6.3.L OF THE SAID AGREEMENT, IT IS THE DUT Y OF THE DISTRIBUTOR TO ENSURE THAT PREPAID SIM CARDS / SCRATCH VOUCHERS / RECHARG E VOUCHERS / V-TOP UP ETC. ARE TO BE SUPPLIED TO A PROSPECTIVE SUBSCRIB ER OR CUSTOMER ONLY AFTER COLLECTING DULY FILLED IN CUSTOMER APPLICATION FORM (CAF) ALONG WITH COPIES OF PROOF OF IDENTITY (POI) AND PROOF OF ADDRESS (PO A) AND AFTER DUE VERIFICATION VIS--VIS THE ORIGINALS AND IT IS ALSO PRESCRIBED IN THE SAME PARA THAT DISTRIBUTOR AND ITS AUTHORIZED RETAILER SHALL SEAL AND SIGN A DECLARATION THAT THEY HAVE SEEN THE SUBSCRIBER, THE ORIGINAL PR OOF OF IDENTITY (POI) AND PROOF OF ADDRESS (POA) AND THE PHOTOGRAPH OF THE SU BSCRIBER MATCHES WITH THE PROOF OF IDENTITY AND THE SUBSCRIBER. IT IS AL SO THE RESPONSIBILITY OF THE DISTRIBUTOR OR AUTHORIZED RETAILER TO ENSURE THAT T HE END USER COMPLETELY FILLS OUT THE TERMS AND CONDITION LEAFLET AND THE CUSTOME R APPLICATION FORM AND ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 6 OF 8 SUBMITS THE PROOF OF ADDRESS AND PROOF OF IDENTITY AS STIPULATED BY THE DEPARTMENT OF TELECOMMUNICATIONS, GOVERNMENT OF IND IA. THE BENCH POINTED OUT THAT WHETHER THESE SERVICES TO BE RENDE RED BY THE DISTRIBUTOR OR ITS AUTHORIZED RETAILER DOES NOT AMOUNT TO RENDING OF THE SERVICES TO ASSESSEE AND BECAUSE OF THIS DISCOUNT ALLOWED BY TH E ASSESSEE TO THE DISTRIBUTOR TAKES A CHARACTER OF COMMISSION. IN RE PLY IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE PRODUCT IS SIM CARD AND THE SERVICES BEING RENDERED BY THE ASSESSEE COMPANY THROUGH SIM CARDS AND THESE REQUIREMENTS ARE AS PER THE STIPULATIONS OF DEPARTM ENT OF TELECOMMUNICATIONS, GOVERNMENT OF INDIA, THESE ARE SECONDARY FOR WHICH NO SEPARATE SERVICE CHARGES OR DISCOUNT OR COMMISSI ON IS PAID BY THE ASSESSEE TO THE DISTRIBUTOR OR AUTHORIZED RETAILER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL WE DECIDE THIS ASPECT AS TO WHETHER BECAUSE OF SUB-CLAUSE ( L ) OF PARA 6.3 OF THE DISTRIBUTORSHIP AGREEMENT, RELATIONSHIP BETWEEN THE ASSESSEE AND TH E DISTRIBUTOR CAN BE TERMED AS THAT OF PRINCIPAL TO AGENT. FOR READY RE FERENCE, WE REPRODUCE THIS PARA FROM PAGE NOS. 18 AND 19 OF THE PAPER BOOK. 6.3 (L) AND ITS AUTHORISED RETAILER SHALL DELIVER P REPAID SIM CARDS / SCRATCH VOUCHERS / RECHARGE VOUCHERS / V-TOP UP ETC ., TO A PROSPECTIVE SUBSCRIBER/CUSTOMER ONLY AFTER COLLECTI NG DULY FILLED IN CUSTOMER APPLICATION FORM (CAF) ALONG WITH COPIES O F PROOF OF DENSITY (POI) AND PROOF OF ADDRESS (POA) AND, AFTER DUE VERIFICATION VIS-A-VIS THE ORIGINALS. THE SCD AND ITS AUTHORISED RETAILER SHALL SEAL AND SIGN A DECLARATION THAT THEY HAVE SEEN THE SUBS CRIBER, THE ORIGINAL PROOF OF IDENTITY (POI) AND PROOF OF ADDRESS (FDA), AND THE PHOTOGRAPH OF THE SUBSCRIBER MATCHES WITH THE PROOF OF IDENTITY AND THE SUBSCRIBER. THE SCD SHALL BEFORE THE PURCHASE B Y THE END USER/ PROSPECTIVE SUBSCRIBER/CUSTOMER OF THE PREPAID SIM CARDS / SCRATCH VOUCHERS / RECHARGE VOUCHERS / V-TOP UP ETC. ENSURE THAT THE END USER COMPLETELY FILLS OUT THE TERMS AND CONDITION LEAFLE T AND THE CUSTOMER APPLICATION FORM AND SUBMITS THE PROOF OF ADDRESS ( POA) AND PROOF OF IDENTITY (POI) AS STIPULATED BY THE DEPARTMENT O F TELECOMMUNICATIONS, GOVERNMENT OF INDIA. THE SCD SH ALL ALSO ENSURE THAT HIS AUTHORISED RETAILER SHALL SIMILARLY CAUSE HIS, END USER/ PROSPECTIVE SUBSCRIBER/CUSTOMER TO FILL OUT THE TER MS AND CONDITION LEAFLET AND THE CUSTOMER APPLICATION FORM IN ALL RE SPECT AS MENTIONED HEREINBEFORE. THE SCD SHALL AFTER PURCHASE BY THE E ND-USER/ PROSPECTIVE SUBSCRIBER/CUSTOMER OF THE IDEA SERVICE S OFFERED BY HIM OR AFTER PURCHASE BY THE END-USER/ PROSPECTIVE SUBS CRIBER/CUSTOMER OF THE IDEA SERVICES OFFERED BY THE AUTHORISED RETAILE R APPOINTED BY IT, SHALL FORTHWITH SEND THESE COMPLETELY FILLED OUT FO RMS ALONG WITH PROOF ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 7 OF 8 OF ADDRESS (POA) AND PROOF OF IDENTITY (POI) TO THE COMPANY, TO ENABLE THE COMPANY TO KEEP A RECORD OF THE SUBSCRIB ER TO WHOM IDEA SERVICES WERE PROVIDED, THE DENOMINATIONS AND THE V ALIDITY PERIODS THEREOF AS REQUIRED BY THE DEPARTMENT OF TELECOMMUN ICATIONS, GOVERNMENT OF INDIA UNDER THE TERMS AND CONDITIONS OF LICENSE GRANTED BY THE DEPARTMENT OF TELECOMMUNICATIONS, GO VERNMENT OF INDIA TO THE COMPANY. 9. AFTER GOING THROUGH THIS PARA OF THE AGREEMENT, WE ARE OF THE CONSIDERED OPINION THAT THE REQUIREMENTS AS PER THIS PARA IS I N RESPECT OF THE SPECIFIED CONDITIONS AFTER COMPLYING WITH WHICH THE DISTRIBUT OR OR THE AUTHORIZED RETAILER CAN DELIVER THE SIM CARD TO A PROSPECTIVE SUBSCRIBER / CUSTOMER AND IN OUR CONSIDERED OPINION, THIS REQUIREMENT OF THE AGREEMENT DOES NOT CHANGE THE CHARACTER OF RELATIONSHIP BETWEEN THE AS SESSEE AND THE DISTRIBUTOR BECAUSE THIS IS AS PER THE LAW LAID DOW N BY GOVT. OF INDIA AND NOT ANY SPECIAL REQUIREMENT OF THE ASSESSEE. AS PER PA RA 4 OF THE SAID AGREEMENT, THE DISTRIBUTOR IS REQUIRED TO MAKE ADVA NCE PAYMENT TO THE ASSESSEE COMPANY TOWARDS THE VALUE OF THE AIRTIME P URCHASED THROUGH PRE- PAID SIM CARDS / RECHARGE VOUCHERS / V-TOP UP ETC. AFTER REDUCING AMOUNT OF DISCOUNT TO BE ALLOWED BY THE ASSESSEE FROM THE MRP OF THE CONCERNED PRE-PAID SIM CARDS / RECHARGE VOUCHERS / V-TOP UP E TC. THIS IS ALSO EXPLAINED THAT THE SAID DISTRIBUTOR OR RETAILER CAN SALE SUCH PRE-PAID SIM CARDS / RECHARGE VOUCHERS / V-TOP UP ETC. TO THE EN D USER AT ANY PRICE BELOW THE MRP AND THERE IS NO CONTROL OF THE ASSESS EE ON THE PRICE TO BE CHARGED BY THE DISTRIBUTOR OR RETAILER EXCEPT THIS THAT THEY CANNOT SALE AT A PRICE HIGHER THAN THE MRP. THE CASE OF THE DEPARTM ENT IS THIS THAT MRP (-) DISCOUNTED PRICE OFFERED BY THE ASSESSEE TO THE DIS TRIBUTOR IS PAYMENT OF COMMISSION BY THE ASSESSEE TO THE DISTRIBUTOR. WHE N THE DISTRIBUTOR / RETAILER CAN SALE AT A PRICE BELOW MRP AS PER HIS C HOICE AND MARKET CONDITIONS, IT CANNOT BE SAID THAT THE DIFFERENCE B ETWEEN MRP AND DISCOUNTED PRICES BEING CHARGED BY THE ASSESSEE TO THE DISTRIBUTOR IS A PAYMENT OF COMMISSION BY THE ASSESSEE TO THE DISTRI BUTOR. THIS ALSO DOES NOT CHANGE THE RELATIONSHIP OF THE ASSESSEE AND ITS DISTRIBUTORS FROM THAT OF PRINCIPAL TO PRINCIPAL TO THAT OF PRINCIPAL AND AGE NT. IN THE FACTS OF PRESENT CASE AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED O PINION THAT RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUTOR IS THAT OF PRINCIPAL TO PRINCIPAL AND NOT PRINCIPAL TO AGENT. ITA NOS. 1942, 2206 & 2207/BANG/2018 PAGE 8 OF 8 10. REGARDING THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT ON WHICH RELIANCE HAS BEEN PLACED BY LD. DR OF REVENUE, WE FIND THAT THE SAID JUDGEMENT WAS DULY CONSIDERED IN THE JUDGEMENT OF HONBLE RAJASTH AN HIGH COURT IN ASSESSEES OWN CASE AS PER ITS JUDGEMENT DATED 11.0 7.2017 AS REPORTED IN [2018] 402 ITR 539. EVEN AFTER CONSIDERING THIS JU DGEMENT OF HONBLE CALCUTTA HIGH COURT, HONBLE RAJASTHAN HIGH COURT H AS DECIDED THE ISSUE IN ASSESSEES OWN CASE ALSO IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN SPITE OF A SPECIFIC QUERY, THE LD. DR OF REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS IN THE PRESENT CASE AND IN THE CASE WHICH IS DECIDED BY HONBLE RAJASTHAN HIGH COURT AND BY THE BANGALORE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS AND THE JUDGE MENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF BHARTI AIRTEL LTD. VS. DCIT (SUPRA). HENCE WE ARE DUTY BOUND TO FOLLOW THE BIN DING JUDGMENT OF HONBLE KARNATAKA HIGH COURT AND ALSO THE TRIBUNAL ORDER OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEA RS. ACCORDINGLY, WE RESPECTFULLY FOLLOW THESE JUDGEMENTS AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 11. IN THE RESULT, ALL THE THREE APPEALS FILED BY T HE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: THE 08 TH FEBRUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.