Tribunal held that the relationship between the assessee and its holding company was that of Principal and Principal and not that of Principal and agent. The discount which was offered to the distributors was given for promotion of sales. This element could not be treated as commission. Accordingly no disallowance can be made for failure to deduct tax at source . ( AY.2011-12)
Nokia India Pvt. Ltd. v. Add. CIT (2020) 82 ITR 16 ((SN)(Delhi) Trib)
S. 40(a)(ia): Amount not deductible -Deduction at source – Fees for professional or technical services – Discount offered to distributors – Non -Resident – Not liable to deduct tax at source- Allowable as expenditure [ S. 9(1) (vi), 37(1) , 194J , 195 ]S. 40(a)(ia): Amount not deductible -Deduction at source – Fees for professional or technical services – Discount offered to distributors – Non -Resident – Not liable to deduct tax at source- Allowable as expenditure [ S. 9(1) (vi), 37(1) , 194J , 195 ]