| COURT: | Rajasthan High Court |
| CORAM: | Inderjeet Singh J, K. S. Jhaveri J |
| SECTION(S): | 194-H, 201(1), 201(1A) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | actual payment, discount, TDS deduction |
| COUNSEL: | Abhishek Sharma, Ajay Vohra, Gaurav Jain, N. M. Ranka |
| DATE: | July 11, 2017 (Date of pronouncement) |
| DATE: | December 4, 2017 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 194H, 201(1): An obligation to deduct TDS u/s 194H arises only if the relationship is that of "principal and agent" and if a "payment" is made. As the relationship between the assessee and the distributor was that of "principal to principal" and as the "discount" did not amount to a "payment", there was no liability to deduct TDS | |
Taking into account the provisions of Section 182 of the Contract Act and the arrangement which has been entered into between the company and the distributor and taking into account the provisions of Section 194H, the Tribunal while considering the evidence on record, in our considered opinion, has misdirected itself in considering the case from an angle other than the angle which was required to be considered by the Tribunal under the Income Tax Act. The Tribunal has travelled beyond the provisions of Section 194H where the condition precedent is that the payment is to be made by the assessee and thereafter he is to make payment. In spite of our specific query to the counsel for the department, it was not pointed out that any amount was paid by the assessee company. It was only the arrangement by which the amount which was to be received was reduced and no amount was paid as commission
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