IDEA CELLULAR LTD. Vs. ASSISTANT COMMISSIONER OF INCOME TAX (TDS)
LAWS(IT)-2014-5-70
INCOME TAX APPELLATE TRIBUNAL
Decided on May 23,2014

Idea Cellular Ltd. Appellant
VERSUS
ASSISTANT COMMISSIONER OF INCOME TAX (TDS) Respondents

JUDGEMENT

- (1.) THESE six appeals are by assessee against the Orders of the CIT(A), Hyderabad dated 25.03.2011 in respective A.Ys. Even though separate orders are passed, issues are common, therefore, these appeals are heard together and decided by this common order.
(2.) WE have heard Ld. Counsel and learned CIT/D.R.and also perused the written submissions placed by the Ld. Counsel running into pages 1 to 20 elaborately explaining the contentions.
(3.) BRIEFLY stated facts are that the assessee -company is engaged in the business of providing cellular mobile telephone services to its customers in Andhra Pradesh through a net work of distributors. In order to verify its compliance towards TDS provisions, a survey was conducted in the business premises of the assessee on 13.10.2009. A.O. found that assessee company is not deducting tax at source in case of commission payments made to distributors on prepaid connections. Assessee has claimed that the commission allowed to distributors is in the nature of discount only and therefore, provisions of section 194H the Income Tax Act, 1961 are not applicable. A.O. analysed the transactions and held that like in postpaid mobile connections, on the prepaid connections also assessee is giving discount and accordingly, he held that assessee is liable for deduction of tax and raised demands as per the provisions of section 201(1) and consequent interest liability under section 201(1A). Assessee took -up the matter before the Ld. CIT(A). It was contended before the Ld. CIT(A) that the discount given to the distributors at the time of selling prepaid cards cannot be considered as commission and relied on the Coordinate Bench decision in the case of ACIT vs. Idea Cellular Ltd., dated 26.02.2009. However, Ld. CIT(A) distinguished the decision and followed the ITAT, Cochin Bench in the case of Vodafone Cellular Ltd. vs. ACIT dated 30thApril, 2009 which also inturn, followed the Hon'ble Kerala High Court decision in the case of BPL Mobile Cellular Ltd. vs. State of Kerala dated 13th February, 2009. Ld. CIT(A) also followed the decision of ITAT Delhi Bench in the case of Idea Cellular Ltd. vs. DCIT. Ld. CIT(A) also relied on the decision of Hon'ble Delhi High Court in the case of CIT vs. Idea Cellular Ltd. dated 19.02.2010 andBSNL vs. Union of India 282 ITR 273 (SC) to uphold the A.O's contentions However, Ld. CIT(A) gave relief directing the A.O. to verify the claim of the assessee that recipients/ payees paid taxes. Ld. CIT(A) took into consideration the principles laid down by the Hon'ble Supreme Court in the case of Hindustan Cocacola Beverage P. Ltd. vs. CIT 293 ITR 226 to direct the A.O. to give relief to the extent of tax paid by the recipient / payees. Accordingly, the appeals were partly allowed.;


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