CHOCOPACK ENTERPRISES, Jaipur V. ITO, Jaipur

ITA 821/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2000 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 16-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHARA J CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Period of limitation; Condonation of delay

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 821/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 M/S CHOCOPACK ENTERPRISES, 7, JAI AMBAY COLONY, ESI HOSPITAL, AJMER ROAD, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 2(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADFC1995R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADV.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHARA (J.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/10/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 13/10/2017 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) DATED 19.05.2016 FOR THE A.Y. 2011-12. 2. THERE IS DELAY OF 38 DAYS IN FILING THE PRESENT APPEAL THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY WHICH IS SUPPORTED BY AN AFFIDAVIT. ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 2 3. I HAVE HEARD THE LD. AR AS WELL AS LD. DR ON CON DONATION OF DELAY OF 38 DAYS IN FILING THE PRESENT APPEAL. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT IN THE MONTH OF MAY, 2016 WIFE OF TH E BROTHER OF THE ASSESSEE EXPIRED AND THEREFORE, THE ASSESSEE WAS OU T OF STATION DURING THE PERIOD WHEN THE LIMITATION FOR FILING THE PRESE NT APPEAL WAS TO EXPIRE. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE D ELAY IN FILING THE APPEAL IS NEITHER INTENTIONAL NOR WILLFUL BUT DUE TO THE CIRCUMSTANCES WHICH WERE BEYOND CONTROL OF THE ASSESSEE. HENCE, HE PLEADED THAT THE DELAY OF 38 DAYS MAY BE CONDONED AND THE APPEAL OF THE ASSESSEE MAY BE DECIDED ON MERITS. ON THE OTHER HAND, LD. DR HAS OBJECTED TO T HE CONDONATION OF DELAY. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSED OF CONTENTS OF THE PETITION FOR CONDONATION OF DELAY AS WELL AS OF THE AFFIDAVIT I AM SATISFIED THAT THE ASSESSEE WAS HAVING A REAS ONABLE CAUSE IN NOT PRESENTING THE PRESENT APPEAL WITHIN THE PERIOD OF LIMITATION. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN THE INTEREST OF JUST THE DELAY OF 38 DAYS IN FILING THE APPEAL IS CONDON ED. 5. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL AS UNDER:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 7,51,543/- ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES WHER EAS THERE WAS ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 3 NO LIABILITY OF THE ASSESSEE TO DEDUCT THE TDS AS T HE PAYMENT MADE WAS ONLY DISCOUNT. THE SOLITARY ISSUE RAISED IN THIS APPEAL OF THE ASS ESSEE IS REGARDING DISALLOWANCE MADE BY THE AO UNDER SECTION 40(A)(IA) FOR WANT OF DEDUCTION OF TAX AT SOURCES IN RESPECT OF THE COMMI SSION/DISCOUNT TO THE RETAILERS OF RECHARGE CARDS. THE ASSESSEE IS A PART NERSHIP FIRM AND IN THE BUSINESS OF DISTRIBUTORSHIP OF IDEA RECHARGE CARDS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS DEBITED THE EXPENSE S TO THE TUNE OF RS. 48,94,323/- ON ACCOUNT OF DISCOUNT ON ONLINE SCHEM E. THE AO PROPOSED TO DISALLOWANCE THIS CLAIM OF DEDUCTION AS THE ASSE SSEE HAS NOT DEDUCTED TAX AS PER PROVISIONS OF SECTION 194H. ACCORDINGLY, THE AO MADE DISALLOWANCE OF RS. 7,51,543/- ON ACCOUNT OF COMMIS SION EXPENSES U/S 40(A)(IA). THE ASSESSEE CHALLENGED THE ACTION OF TH E AO BEFORE THE LD. CIT(A) AND CONTENDED THAT THE ASSESSEE HAS NOT MADE ANY PAYMENT TOWARDS DISCOUNT OF RS. 7,51,543/- DEBITED IN THE P &L ACCOUNT BUT THE DISCOUNT WAS ALLOWED BY THE SERVICE PROVIDER AND T HE TRANSACTION IS ROUTED THROUGH THE ASSESSEE COMPANY BEING A DISTRIBUTOR. T HEREFORE, THE ASSESSEE HAS ONLY MADE THE ENTRIES IN THE BOOKS OF ACCOUNTS WITHOUT HAVING ANY DIRECT ROLE IN ALLOWING DISCOUNT OR COMMISSION TO T HE RETAILER. IT WAS ALSO CONTENDED THAT THE ASSESSE HAS NO DISCRETION IN F IXING PERCENTAGE OF DISCOUNT/ COMMISSION ON RECHARGE COUPONS BUT THE SE RVICE PROVIDER ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 4 COMPANY HAS SOLE POWER IN FIXING THE DISCOUNT ON S ALE OF RECHARGE COUPONS AS IT LAUNCHED SCHEME TIME TO TIME. THUS THE ASSESSEE HAS FORCEFULLY CONTENDED THAT THE PAYMENT OF DISCOUNT I S MADE BY THE COMPANY DIRECTLY TO THE RETAILER AND THE ASSESSEE WAS UNDER NO OBLIGATION TO PAY DISCOUNT OR DEDUCT TAX U/S 194H. THE LD. CIT(A) W AS NOT IMPRESSED WITH THE CONTENTION OF THE ASSESSEE AND UPHELD THE DISAL LOWANCE MADE BY THE AO. 6. BEFORE THE TRIBUNAL THE LD. AR OF THE ASSESSEE H AS SUBMITTED THAT THE ASSESSEE HAS NO DISCRETION IN FIXING PERCENTAGE OF DISCOUNT IN RECHARGE COUPONS ON SALE BY RETALIATORS AS THE COMPANY HAS S OLE POWERS IN FIXING THE ABOVE DISCOUNT ON SALE AS PER THE SCHEME FROM T IME TO TIME. HE HAS REITERATED THE CONTENTIONS RAISED BEFORE THE AUTHOR ITIES BELOW. THE LD. AR OF THE ASSESSEE HAS RELIED UPON THE DECISION OF HON BLE KARNATAKA HIGH COURT IN CASE OF BHARTI AIRTEL LTD. VS. CIT 372 IT R 33 AND SUBMITTED THAT THE HONBLE HIGH COURT WHILE DEALING WITH IDENTICAL ISSUE HAS HELD THAT THE DISTRIBUTORS DOES NOT EARN ANY INCOME AT THE TIME OF SELLING RECHARGE CARDS/VOUCHERS RATHER THE DISTRIBUTOR INCURRED EXP ENDITURE FOR PURCHASE OF THESE CARDS AND ONLY AFTER RESALE OF THOSE RECHARG E CARDS THE DISTRIBUTOR WOULD DERIVE INCOME AT THE TIME OF SELLING THESE PR EPARED CARDS. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT BY APPLYING T HE SAME ANALOGY NO INCOME IS EARNED BY THE RETAILERS AT THE TIME THESE VOUCHERS/ CARDS ARE ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 5 SOLD TO THE RETAILERS BUT THE RETAILERS INCURRED TH E EXPENDITURE AT THE TIME OF PURCHASE. 7. HE HAS FURTHER SUBMITTED THAT THE INCOME EARNED BY THE RETAILERS WOULD DEPEND UPON THE TIME OF SALE AND THE SCHEME P REVAILING AT THAT POINT OF TIME. THEREFORE, THE LD. AR HAS SUBMITTED THE DEDUCTION OF TAX AT SOURCE BEING A VARIOUS RESPONSIBILITY AND WHEN THE RE IS NO DIRECT PAYMENT OR INCOME AT THE TIME OF SALE OF THESE CARDS TO THE RETAILER THEN THE ASSESSEE HAS NO OBLIGATION TO DEDUCT THE TAX AT SOU RCE. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT WHEN THE ASSESSEE IS NO T FIXING ANY DISCOUNT OR COMMISSION OR MAKING THE PAYMENT OF SAME TO THE RETAILER THEN, THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT TAX AT SO URCE. 8. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT IN THE TAX AUDIT REPORT, THE AUDITOR OF THE ASSESSEE HAS STATED THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF CHAPTER XVII-B AS N O TDS HAS BEEN DEDUCTED BY THE ASSESSEE FOR COMMISSION PAID TO THE RETAILERS EITHER OWN ACCOUNT OR THROUGH COMPANY UNDER SECTION 194H. HE H AS FURTHER CONTENDED THAT EVEN THE AUDITOR OF THE ASSESSEE HAS STATED THAT THE PAYMENT UNDER CONSIDERATION IS COMMISSION AND NOT D ISCOUNT AS CLAIMED BY THE ASSESSEE, THEREFORE, THE PROVISIONS OF SECTI ON 194H ARE APPLICABLE IN RESPECT OF THE AMOUNT IN QUESTION FOR WHICH THE ASS ESSEE HAS NOT DEDUCTED TAX AT SOURCE. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 6 CHANDIGARH BENCHES TRIBUNAL IN CASE OF ITO VS. SMA RT DISTRIBUTORS (2013) 36 CCH 0466 AS WELL AS THE DECISION OF HONBLE KARA LA HIGH COURT IN CASE OF VODAFONE ESSAR CELLULAR LTD. VS. ACIT. HE HAS AL SO RELIED ON THE DECISION OF HONBLE CALCUTTA HIGH IN CASE OF HUTCHISON TELEC OM EAST LTD. VS. CIT 232 TAXMAN 665 AND SUBMITTED THAT THE HONBLE HIGH COURT AFTER CONSIDERING THE DECISION OF HONBLE KARNATKA HIGH COURT IN CASE BHARTI AIRTEL LTD. VS. CIT (SUPRA) HAS DECIDED THIS ISSUE IN FAVOUR OF THE REVENUE BY HOLDING THAT THE ASSESSEE WAS RESPONSIBLE PERSO N FOR PAYING COMMISSION AND THEREFORE, THE PROVISIONS OF SECTION 194H ARE ATTRACTED. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITY BELOW. 9. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEES FIRM ENGAGED IN THE BUSINESS OF DISTRIBUTORSHIP OF IDEA RECHARGE CARDS. THE ISSUE I NVOLVED IN CASE OF THE ASSESSEE IS IN RESPECT OF SALE OF RECHARGE COUPONS AND NOT THE SALE OF SIM CARDS. THEREFORE TO THE EXTENT THE ISSUE OF SALE O F SIM CARDS BY THE SERVICE PROVIDER IT IS HELD BY THE HONBLE KARNATKA HIGH CO URT IN THE CASE OF BHARATI AIRTEL LTD. VS. CIT (SUPRA) THAT THE ASSESS EE IS THE SERVICE PROVIDER HAD NO OBLIGATION TO DEDUCT TDS AND ACCORDINGLY WH EN THE SERVICE PROVIDER HAS IS UNDER NO OBLIGATION TO DEDUCT TAX , THE DISTRIBUTOR WOULD ALSO NOT UNDER OBLIGATION TO DEDUCT TDS. HOWEVER, T HE SAID DECISION IS ONLY ON THE ISSUE OF SALE SIM CARDS AND THEREFORE, WILL NOT APPLICABLE IN THE CASE ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 7 OF THE ASSESSEE. THE HONBLE SUPREME COURT IN CASE OF BHARAT SANCHAR NIGAM LTD. VS. UNION OF INDIA 282 ITR 273 AS ALSO O BSERVED IN PARAS 85 AND 86 WHICH ARE REPRODUCED AS UNDER:- 85. IN THAT CASE ESCOTAL WAS ADMITTEDLY ENGAGED IN SELLING CELLULAR TELEPHONE INSTRUMENTS, SIM CARDS AND OTHER ACCESSOR IES AND WAS ALSO PAYING CENTRAL SALES TAX AND SALES TAX UNDER T HE KERALA GENERAL SALES TAX ACT, 1963, AS APPLICABLE. THE QUESTION WA S ONE OF THE VALUATION OF THESE GOODS. THE STATE SALES TAX AUTHO RITIES HAD SOUGHT TO INCLUDE THE ACTIVATION CHARGES IN THE COST OF TH E SIM CARD. IT IS CONTENDED BY ESCOTAL THAT THE ACTIVATION WAS PART O F THE SERVICE ON WHICH SERVICE TAX WAS BEING PAID AND COULD NOT BE I NCLUDED WITHIN THE PURVIEW OF THE SALE. THE KERALA HIGH COURT ALSO DEALT WITH THE CASE OF BPL, A SERVICE PROVIDER. ACCORDING TO BPL, IT DID NOT SELL CELLULAR TELEPHONES. AS FAR AS SIM CARDS WERE CONCE RNED, IT WAS SUBMITTED THAT THEY HAD NO SALE VALUE. A SIM CARD M ERELY REPRESENTED A MEANS OF THE ACCESS AND IDENTIFIED TH E SUBSCRIBERS. THIS WAS PART OF THE SERVICE OF A TELEPHONE CONNECT ION. THE COURT REJECTED THIS SUBMISSION FINDING THAT THE SIM CARD WAS GOODS WITHIN THE DEFINITION OF THE WORD IN THE STATE SALE S TAX ACT. 86. IT IS NOT POSSIBLE FOR THIS COURT TO OPINE FINA LLY ON THE ISSUE. WHAT A SIM CARD REPRESENTS IS ULTIMATELY A QUESTION OF F ACT AS HAS BEEN CORRECTLY SUBMITTED BY THE STATES. IN DETERMINING T HE ISSUE, HOWEVER THE ASSESSING AUTHORITIES WILL HAVE TO KEEP IN MIND THE FOLLOWING PRINCIPLES : IF THE SIM CARD IS NOT SOLD BY THE ASS ESSEE TO THE SUBSCRIBERS BUT IS MERELY PART OF THE SERVICES REND ERED BY THE SERVICE PROVIDERS, THEN A SIM CARD CANNOT BE CHARGE D SEPARATELY TO SALES TAX. IT WOULD DEPEND ULTIMATELY UPON THE INTE NTION OF THE PARTIES. IF THE PARTIES INTENDED THAT THE SIM CARD WOULD BE A SEPARATE OBJECT OF SALE, IT WOULD BE OPEN TO THE SA LES TAX AUTHORITIES TO LEVY SALES TAX THEREON. THERE IS INSUFFICIENT MA TERIAL ON THE BASIS OF WHICH WE CAN REACH A DECISION. HOWEVER, WE EMPHA SISE THAT IF THE SALE OF A SIM CARD IS MERELY INCIDENTAL TO THE SERVICE BEING ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 8 PROVIDED AND ONLY FACILITATES THE IDENTIFICATION OF THE SUBSCRIBERS, THEIR CREDIT AND OTHER DETAILS, IT WOULD NOT BE ASS ESSABLE TO SALES TAX. IN OUR OPINION THE HIGH COURT OUGHT NOT TO HAVE FIN ALLY DETERMINED THE ISSUE. IN ANY EVENT, THE HIGH COURT ERRED IN IN CLUDING THE COST OF THE SERVICE IN THE VALUE OF THE SIM CARD BY RELYING ON THE ASPECTS DOCTRINE. THAT DOCTRINE MERELY DEALS WITH LEGISLATI VE COMPETENCE. AS HAS BEEN SUCCINCTLY STATED IN FEDERATION OF HOTEL A ND RESTAURANT ASSOCIATION OF INDIA V. UNION OF INDIA [1989] 3 SCC 634SUBJECTS WHICH IN ONE ASPECT AND FOR ONE PURPOSE FALL WITHIN THE POWER OF A PARTICULAR LEGISLATURE MAY IN ANOTHER ASPECT AND FO R ANOTHER PURPOSE FALL WITHIN ANOTHER LEGISLATIVE POWER. THEY MIGHT B E OVERLAPPING ; BUT THE OVERLAPPING MUST BE IN LAW. THE SAME TRANSA CTION MAY INVOLVE TWO OR MORE TAXABLE EVENTS IN ITS DIFFERENT ASPECTS. BUT THE FACT THAT THERE IS OVERLAPPING DOES NOT DETRACT FRO M THE DISTINCTIVENESS OF THE ASPECTS. NO ONE DENIES THE LEGISLATIVE COMPETENCE OF THE STATES TO LEVY SALES TAX ON SALES PROVIDED THAT THE NECESSARY CONCOMITANTS OF A SALE ARE PRESENT IN THE TRANSACTION AND THE SALE IS DISTINCTLY DISCERNIBLE IN THE TRANS ACTION. THEREFORE, AS THE ISSUE OF SALE OF SIM CARDS IS CON CERNED THE HONBLE SUPREME COURT HAS CLEARLY HELD THAT THE SALE OF SIM CARDS MERELY INCIDENTAL TO THE SERVICE BEING PROVIDED AND ONLY FACILITATES THE IDENTIFICATION OF SUBSCRIBERS THEIR CREDIT AND OTHER DETAILS IT WOULD NOT BE ASSESSABLE TO SALE TAX. AS REGARDS THE SALE OF RECHARGE COUPONS IT IS CLEARLY A TRANSACTION OF SALE OF GOODS AS HELD BY THE HONBLE SUPREME COURT THAT THE TELEPHONE IS NOTHING BUT A SERVICE. HOWEVER, SINCE THE SERVICE I S PROVIDED BY THE COMPANY WHICH IS THE SERVICE PROVIDER AND ASSESSEE IS ONLY A DISTRIBUTOR AND INTERMEDIATETORY, THEREFORE, THE TAX LIABILITY FOR PAYING THE COMMISSION, ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 9 IF ANY, IS ATTRACTED U/S 194H ONLY AGAINST THE PE RSON RESPONSIBLE FOR PAYING THE COMMISSION. IN CASE IN HAND THE ASSESSEE IS NOT PAYING ANY COMMISSION TO THE RETAILERS BUT THIS COMMISSION OR SO CALLED DISCOUNT IS ALLOWED AND PAID BY THE SERVICE PROVIDER. THE ASSES SEE IS AN INTERMEDIATETORY AND ONLY RECORDING THIS TRANSACTIO N IN THE BOOKS OF ACCOUNT FOR THE PURPOSE OF COMPLETENESS. HENCE, WHE N THE ASSESSEE IS NEITHER COMPETENT NOR RESPONSIBLE NOR ACTUALLY PAYI NG ANY COMMISSION TO THE RETAILER ON SALE OF RECHARGE COUPONS TO THE RET AILERS THEN THE OBLIGATION FOR DEDUCT TAX U/S 194 H IS ATTRACTED ON LY AGAINST THE SERVICE PROVIDER AND NOT AGAINST THE ASSESSEE WHO IS ONLY A DISTRIBUTOR AND RECEIVING ITS SHARE OF THE COMMISSION/ MARGINS PROV IDED BY THE SERVICE PROVIDER. THE DETERMINATION OF SALE PRICE OF RECHAR GE COUPONS IS IN THE SOLE DOMAIN OF THE SERVICE PROVIDER AND THE ASSESS EE IS NO ROLE IN DETERMINING THE RETAIL PRICE AT WHICH THE RETAILER IS SELLING THE RECHARGE COUPONS TO THE CUSTOMER OR END USER OF THE SERVICE . THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE ASSESS EES ROLE IS ONLY AN INTERMEDIATETORY AND PASSING THE SERVICES FROM ONE HAND TO THE OTHER HAND THEN MERELY BECAUSE THE ASSESSEE IS SHOWING A N AMOUNT OF COMMISSION/DISCOUNT IN THE BOOKS OF ACCOUNT FOR CO MPLETENESS OF ACCOUNTS AND TRANSACTIONS WILL NOT IMPUTE ANY LIABI LITY OF DEDUCTING TAX AT SOURCE. THE DECISIONS RELIED UPON BY THE LD. DR A RE ALSO ON THE POINT ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 10 WHERE THE SERVICE PROVIDER IS ALLOWING OR PAYING TH E COMMISSION TO THE DISTRIBUTORS OR RETAILERS AND SALE OF SIM CARDS AS WELL AS RECHARGE COUPONS, THEREFORE, EVEN FOR THE SAKE OF ARGUMENTS IF IT IS ACCEPTED THAT THE BENEFIT ALLOWED BY THE SERVICE PROVIDER TO THE DIST RIBUTORS AND RETAILERS IS COMMISSION IT IS SERVICE PROVIDER WHO IS RESPONSIB LE FOR PAYING THE SAID COMMISSION AND THEREFORE, THE PROVISIONS OF SECTION 194H ARE NOT ATTRACTED AGAINST THE DISTRIBUTOR. ACCORDINGLY, WHEN THE ASSE SSEE IS NOT DIRECTLY AND INDIRECTLY IN DECIDING THE QUANTUM OF ALLEGED COM MISSION/DISCOUNT AS WELL AS DETERMINING THE RETAIL PRICE AT WHICH THE RECHAR GE COUPONS IS SOLD TO THE CUSTOMER THEN THE PROVISIONS OF SECTION 194H CANNOT BE APPLIED ON THE ASSESSEE. CONSEQUENTLY DISALLOWANCE MADE BY THE AO U/S 40 (A)(IA) IS DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/10/2017. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL; @ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/10/2017 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S CHOCOPACK ENTERPRISES, 7, JAI AM BAY COLONY, ESI HOSPITAL, AJMER ROAD, JAIPUR. ITA 821/JP/16_ M/S CHOCOPACK ENTERPRISES VS. ITO 11 2. IZR;FKH @ THE RESPONDENT- THE ITO, WARD 2(3), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 821/JP/16) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR