Tax deducxted at source u/s194H
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 June 2011
After the recent decisions in the case of Vodafone by Kerla high court, Idea cellular by Delhi High court whereby discount given to Distributors was held as Commission and liable for TDS provisions,Whether Commission passsed on by the Distributor to retailers appointed by him is also liabile to TDS deduction.
Please clarify immediately as urgently required in view of Income tax Departments show cause to distributors in view of above said recent decisions
Please clarify immediately as urgently required in view of Income tax Departments show cause to distributors in view of above said recent decisions
CA PARAS BAFNA
(Expert)
15 June 2011
1. VODAFONE is giving discounts to Distributor which is commission liable for TDS.
2. Distributors are passing on such Discount to Retailers.
3. Let us analyse the situation.
Distributor has passed the object to the retailers. The object was received by him from VODAFONE.
*
The Distributor is a mediator between VODAFONE and retailer and does not perform any operation on the object.He passes it as it is.
*
VODAFONE can not establish it as a sale of an object to the Distributor.
*
How the distributor can say that , he has passed an object other than received from the company.
*
When the object has been told by the court as commission- it will be passed as commission.
*
Had he received Purchases from the Company, he could have said that I sold. But this is not the situation now.
*
2. Distributors are passing on such Discount to Retailers.
3. Let us analyse the situation.
Distributor has passed the object to the retailers. The object was received by him from VODAFONE.
*
The Distributor is a mediator between VODAFONE and retailer and does not perform any operation on the object.He passes it as it is.
*
VODAFONE can not establish it as a sale of an object to the Distributor.
*
How the distributor can say that , he has passed an object other than received from the company.
*
When the object has been told by the court as commission- it will be passed as commission.
*
Had he received Purchases from the Company, he could have said that I sold. But this is not the situation now.
*
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