Sonali Kilaje 11.2-ITXA-1152-17+.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1152 OF 2017 Commissioner of Income Tax(TDS) Pune .. Appellant v/s. M/s.Vodafone Cellular Ltd. .. Respondent WITH INCOME TAX APPEAL NO. 1274 OF 2017 Commissioner of Income Tax(TDS) Pune .. Appellant v/s. Vodafone Cellular Ltd. .. Respondent WITH INCOME TAX APPEAL NO. 1995 OF 2017 Commissioner of Income Tax(TDS) Pune .. Appellant v/s. M/s.Vodafone Cellular Ltd. .. Respondent WITH INCOME TAX APPEAL NO. 571 OF 2018 Commissioner of Income Tax(TDS) Pune .. Appellant v/s. Vodafone Cellular Ltd. .. Respondent WITH INCOME TAX APPEAL NO. 1266 OF 2018 Commissioner of Income Tax(TDS) Pune .. Appellant v/s. Vodafone Cellular Ltd. .. Respondent 1 of 6 ::: Uploaded on - 30/01/2020 ::: Downloaded on - 01/02/2020 10:02:31 ::: Sonali Kilaje 11.2-ITXA-1152-17+.doc Mr. Sham Walve a/w. Mr.Pritesh Chatterjee for Appellant. Ms. Mrunal J. Parekh i/b. DMD Advocates for Respondent. CORAM: UJJAL BHUYAN, & MILIND N. JADHAV, JJ. DATE : JANUARY 27, 2020. P. C.:- . This order will dispose of all above five appeals. 2. Heard Mr. Sham Walve, learned standing counsel revenue for appellant and Ms.Mrunal J. Parekh, learned counsel for respondent-assessee. 3. Without entering into factual details, it is seen that in all these appeals, revenue has proposed following two questions as substantial questions of law : a) Whether on facts and in circumstances of case and in law, Hon ble ITAT was justified in holding that TDS provisions under section 194H of Income Tax Act, 1961 are not attracted on discounts given by assessee to distributors of prepaid SIM cards ? 2 of 6 ::: Uploaded on - 30/01/2020 ::: Downloaded on - 01/02/2020 10:02:31 ::: Sonali Kilaje 11.2-ITXA-1152-17+.doc b) Whether on facts and in circumstances of case and in law, Hon ble ITAT erred in setting aside case of AO ? 4. From above what is discernible is that issue raised in these bunch of appeals is whether provisions of Section 194H of Income Tax Act, 1961 (briefly Act hereinafter) will be applicable in case of discounts given by assessee to distributors on account of prepaid SIM cards. 5. Section 194H of Act deals with commission or brokerage. It says that any person, not being individual or Hindu undivided family, who is responsible for paying, on or after 1 st day of June, 2001, to resident, any income by way of commission(not being insurance commission referred to in section 194D) or brokerage, shall, at time of credit of such income to account of payee or at time of payment of such income in cash or by issue of cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at rate of five 3 of 6 ::: Uploaded on - 30/01/2020 ::: Downloaded on - 01/02/2020 10:02:31 ::: Sonali Kilaje 11.2-ITXA-1152-17+.doc percent. 6. In Pr. Commissioner of Income Tax-8, Mumbai v/s. M/s.Reliance Communications Infrastructure Ltd. - Income Tax Appeal No. 702 of 2017 decided on 22.07.2019, this Court held that when transaction is between two persons on principal to principal basis, deduction of tax at source as per Section 194H of Act would not be made since payment was not for commission or for brokerage. It was held as under : 3. Having heard learned Counsel for parties and having perused documents on record, we do not find any error in view of Tribunal. Tribunal, as noted, besides holding that Commissioner s order setting aside order passed u/s 201 was not carried in appeal, had also independently examined nature of transaction and come to conclusion that when transaction was between two persons on principal to principal basis, deduction of tax at source as per section 194H of Act, would not be made since payment was not for commission or brokerage. 4 of 6 ::: Uploaded on - 30/01/2020 ::: Downloaded on - 01/02/2020 10:02:31 ::: Sonali Kilaje 11.2-ITXA-1152-17+.doc 7. above view has been followed by this Court in Income Tax Appeal No. 1129 of 2017- Commissioner of Income Tax (TDS) Pune V/s. M/s.IDEA Cellular Ltd., decided on 13.01.2020. This Court followed earlier decision in M/s. Reliance Communications Infrastructure Ltd. (supra) and held that no substantial question of law arose from such finding of Tribunal. 8. Adverting to facts of present case, Tribunal held as under : 36. In view of our discussion in preceding paragraphs we hold that sale of SIM cards / recharge coupons at discounted rate to distributors is not commission and therefore not liable to TDS u/s. 194H of I.T.Act. However, we have restored issue to file of Assessing Officer for necessary verification in light of decision of Hon ble Karnataka High Court (supra). Therefore, grounds for other years on issue of liability u/s. 194H are allowed for statistical purposes. We hold and direct accordingly. 9. In view of above and following earlier decision of this Court in M/s.Reliance Communications Infrastructure Ltd. (supra), 5 of 6 ::: Uploaded on - 30/01/2020 ::: Downloaded on - 01/02/2020 10:02:31 ::: Sonali Kilaje 11.2-ITXA-1152-17+.doc we are of view that Tribunal was justified in holding that provisions of Section 194H of Act was not applicable on discounts given by assessee to distributors of prepaid SIM cards. 10. Thus upon thorough consideration of mater, we do not find any error or infirmity in view taken by Tribunal. No substantial question of law arises therefrom. 11. Consequently appeals are dismissed. However there shall be no order as to costs. (MILIND N. JADHAV, J.) (UJJAL BHUYAN,J.) 6 of 6 ::: Uploaded on - 30/01/2020 ::: Downloaded on - 01/02/2020 10:02:31 ::: Commissioner of Income-tax (TDS), Pune v. Vodafone Cellular Ltd