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The Tax Publishers Sandu Pharmaceuticals Ltd. v. CIT [ITA No. 2087/Mum/2012, dt. 23-3-2016] : 2016 TaxPub(DT) 2128 (Mum-Trib) Discount to sister concern whether commission subject to TDS under section 194H Facts: Assessee in the business of producting ayurvedic products had given substantial discount to its sister concern on its purchases from the assessee. Such discount was to take care of its entire marketing activities. The said discount was read as commission subject to TDS under section 194H and thus was disallowed under section 40(a)(ia) also upheld by the Commissioner (Appeals). On further appeal: Held by the ITAT in favour of the assessee that the discount was not commission as the transactions were on a principal to principal basis. The sister concern had bought the products from the assessee and was also carrying the inventory risk. Similar structure existed in past years as well where no disallowance was invoked.
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