Supreme Court Resolves S. 194H TDS Controversy Over "Discount" vs. "Commission"

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Tue, Sep 11, 2012 at 9:17 AM
Subject: Message from EGroup of SolapurCAs Supreme Court Resolves S. 194H TDS Controversy Over "Discount" vs. "Commission"
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

CIT vs. Ahmedabad Stamp Vendors Association (Supreme Court)

S. 194H TDS: "Discount" in a "sale" is not "commission or brokerage"

 

The assessee, an association of stamp vendors, bought stamps from the State Govt. at a discount. The department claimed that the stamp vendors were "agents" of the State Govt. and that the said discount was "commission or brokerage" and the State Govt. ought to deduct TDS u/s 194H. The assessee filed a Writ Petition to challenge the department's action. The Gujarat High Court (257 ITR 202) upheld the assessee's plea that (a) title in the stamps passed to the vendors and that they were not "agents" of the State Govt. but were transacting on a "principal to principal" basis and (b) the discount available to the stamp vendors was not "commission or brokerage" so as to fall within s. 194H. On appeal by the department to the Supreme Court, HELD dismissing the appeal:

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Regards,

Editor,

itatonline.org

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