Allowing the appeal, that the relationship between the assessee and HCL was that of principal to principal and not that of principal to agent. The discount which was offered to distributors was given for promotion of sales. This element could not be treated as commission under section 194H of the Act. The disallowance under section 40(a)(ia) was not called for. (AY.2008-09, 2012-13)
Nokia India Pvt. Ltd. v. Add. CIT (2020) 83 ITR 69 (SN) (Delhi)(Trib.)
S. 40(a)(ia) : Amounts not deductible-Deduction at source-Discount offered to distributors for promotion of sales-Not commission-Not liable to deduct tax at source-No disallowances can be made-Trade discount allowable as business expenditure. [S. 194H]