Clipped from: https://www.taxscan.in/distributor-not-required-to-deduct-tds-on-payment-of-turnover-discount-to-dealers-u-s-194h-of-income-tax-act-itat-read-order/271284/?utm_source=izooto&utm_medium=push_notifications&utm_campaign=Distributor%20Not%20Required%20to%20Deduct%20TDS%20on%20Payment%20of%20Turnover%20Discount%20to%20Dealers%20u/s%20194H%20of%20Income%20Tax%20Act:%20ITAT
The Income Tax Appellate Tribunal (ITAT), Kolkata bench has held that the discount paid to dealers by the distributor in the nature of turnover discount is not subject to TDS u/s 194H of Income Tax Act, 1961.
The income tax department approached the ITAT against an order of the CIT(A) wherein the first appellate authority held that the discount given to the various parties by the assessee in the nature of turnover discount did not attract TDS u/s 194H of the Act.
The assessee contended that assessee in the instant case did not have any right or control over the goods sold to the retailers and the goods hold by the retailers on their own behalf and not on behalf of the appellant. In such circumstances, the parties to whom incentive were made by the assessee did not act as an agents of the assessee.
Shri Sonjoy Sarma (Judicial Member), while upholding the CIT(A) order, held that “the ld. CIT(A) rightly observed that the payment of incentive are made to the various parties by the assessee leading to transfer of ownership in the goods (with complete risk and rewards) the assessee in such a situation did not have any right or control over the goods sold to the retailers, as the retailers held the goods on their own behalf and not on behalf of the assessee and therefore they did not act as an agents of the assessee as such no TDS is deductible u/s 194H of the Act as it is not applicable in the case of assessee. Thus we confirmed the order passed by the ld. CIT(A) and there is no need to interfere with the findings given by the ld. CIT(A), therefore, the grounds taken by the revenue are dismissed.”
Shri Siddharth Agarwal, Advocate and Shri Vijay Kumar, Addl. CIT appeared for the assessee and the department, respectively.To Read the full text of the Order CLICK HERE
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ITO vs M/s. Marda Associates
CITATION: 2023 TAXSCAN (ITAT) 800
Counsel for Appellant: Shri Siddharth Agarwal
Counsel for Respondent: Shri Vijay Kumar
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