The Bharat Sanchar Nigam Limited, Jammu V. The Income-tax Officer, (TDS), Jammu

ITA 489/ASR/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9752 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-06-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 24-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. PRAMOD KUMAR, ACCOUNTANT MEMBER AND SH. A.D.JAIN, JUDICIAL MEMBER I.T.A. NOS. 486 TO 489/ASR/2014 ASSESSMENT YEARS: 2008-09 TO 2011-12 PAN /TAN: AMRB10273E BHARAT SANCHAR NIGAM LIMITED O/O GMTD, JAMMU, TELEPHONE EXCHANGE, RAILHEAD COMPLEX, VS. INCOME TAX OFFICER (TDS) AAYKAR BHAWAN, RAILHEAD COMPLEX, JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. PANKAJ GANDOTRA, B.B. BAKSH I RESPONDENT BY: SH. TARSEM LAL DATE OF HEARING: 10.06.2015 DATE OF PRONOUNCEMENT: 12.06.2015 ORDER PER A.D.JAIN (JM): THESE ARE ASSESSEES APPEALS FOR ASSESSMENT YEARS 2 008-09 TO 2010- 11. THE ASSESSEE PSU PROVIDES TWO TYPES OF SERVICES TO THIS FRANCHISEE, I.E; POSTPAID AND PREPAID. COMMISSION WAS ALLOWED TO THE FRANCHISES ON BOTH KINDS OF SERVICES. THE MARGIN OF THE POSTPAID SERVI CES WAS, HOWEVER, TREATED AS COMMISSION, WHERE AS THAT ON PREPAID SERVICES WA S TREATED AS DISCOUNT. I.T.A. NOS. 486 TO 489/ASR/2014 ASSESSMENT YEARS: 2008-09 TO 2011-12 2 TDS ON THE COMMISSION PAID ON POSTPAID SERVICES WAS DEDUCTED UNDER SECTION 194 H OF THE INCOME TAX ACT. HOWEVER, IT WA S NOT SO DONE PROPERLY, ACCORDING TO THE AO, AT PRESCRIBED RATE, QUA THE DI SCOUNT ON THE PREPAID SERVICES. THE AO TREATED THIS DISCOUNT TO BE IN THE NATURE OF COMMISSION. HOWEVER, SHORT DEDUCTION OF TDS WAS WORKED OUT ON T HE BASIS THAT THE FINAL ACCOUNT OF THE FIRM DID NOT REFLECT THE TOTAL COMMI SSION PAID BY THE ASSESSEE. ACCORDINGLY, THE TAX DEDUCTIBLE WAS RECOVERED FROM THE PR UNDER SECTION 201(1) ALONGWITH INTEREST UNDER SECTION 201(1A) OF THE ACT. THE LD. CIT(A) DELETED THE DEMAND FOR TAX. THE LEVY OF INTEREST WA S, HOWEVER, CONFIRMED. THE ASSESSEE IS THEREFORE BEFORE US, NOW. 2. AS BEFORE THE AUTHORITIES BELOW, THE ASSESSEE MA INTAINS THAT THE PR WAS NOT LIABLE TO DEDUCT TAX AT SOURCE UNDER SECTIO N 194H OF THE ACT. THE ASSESSEE HAS PLACED RELIANCE ON BHARTI AIRTEL LIMI TED VS. DCIT, 372 ITR 33 KARNATAKA, WHEREIN, WHILE HOLDING THAT THE CONTE NTION PRECEDENT FOR DEDUCTION OF TAX AT SOURCE CONCERNING COMMISSION PA ID ON SALE OF PREPAID SIM CARD TO DISTRIBUTOR, IS THAT INCOME SHALL HAVE ACCRUED AND THAT WHERE THERE IS NO ACCRUAL OF INCOME, TAX IS NOT TAXABLE O N DISCOUNT ALLOWED TO DISTRIBUTOR. THE LD. DR, ON THE OTHER HAND, HAS PLA CED RELIANCE ON THE DECISION IN CASE OF IDEA CELLULAR LTD. 325 ITR 148 DELHI ON THIS ISSUE. IT IS SEEN, THAT THE JUDICIAL VIEW OF THE VARIOUS HIGH CO URTS IS DIVERGENT REGARDING I.T.A. NOS. 486 TO 489/ASR/2014 ASSESSMENT YEARS: 2008-09 TO 2011-12 3 THE DEDUCTIBILITY OR OTHERWISE OF TAX ON DISCOUNT A LLOWED TO DISTRIBUTOR ON SALE OF PREPAID SIM CARD. HOWEVER, THERE IS NO DECI SION BY THE HONBLE JURISDICTIONAL HIGH COURT, EITHER WAY. THAT BEING S O, ALL THE CASES HAVING BEEN TAKEN INTO CONSIDERATION AND DISTINGUISHED THE REIN AND THE MATTER HAVING BEEN DECIDED IN FAVOUR OF THE ASSESSEE, RESP ECTFULLY FOLLOWING BHARTI AIRTEL LIMITED (SUPRA), WE HOLD, IN ACCORDANCE THE REWITH, THAT NO TAX WAS LIABLE ON THE DISCOUNT ALLOWED BY BSNL TO ITS DISTR IBUTORS ON SALE OF PREPAID SIM CARD, AND THAT THAT BEING SO, NO QUESTION OF LE VY OF ANY INTEREST UNDER SECTION 201(1A) OF THE ACT ARISES. ACCORDINGLY, THE GRIEVANCE OF THE ASSESSEE ACCEPTED AND THE LEVY OF INTEREST UNDER SECTION 201 (1A) OF THE ACT IS CANCELLED. 3. IN THE RESULT ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 /06/2015. SD/- SD/- (PRAMOD KUMAR) ( A.D. JAIN) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 12.06.2015 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT, 4. THE CIT(A), 5. THE DR BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR