Dismissing the appeal of the revenue the Court held that; the assessee did not have any right or control over goods sold to dealers and distributors and all stocks belonged to buyers. Moreover, assessee paid target incentives to dealers only for increasing its sales volume . Accordingly not liable to deduct tax at source . (AY. 2008-09)
PCIT v. Shalimar Chemical Works Ltd. (2018) 257 Taxman 590 (Cal.) (HC)
S. 40(a)(ia): Amounts not deductible – Deduction at source – Commission or brokerage – Selling expenses which consisted of target incentives to distributors -Not liable to deduct tax at source- No disallowance can be made .[ S.194H ]