Regarding TDS on Incentive
ABHISHEK SARAF
Manish Yaduka
Dear all,Whether TDS is liable to be deducted toward Sales Incentive given to dealer in cash or in kind , over and above the Sales target achieved by the dealer.
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CA Manish Yaduka
Email : man...@yadukagroup.com
78, Bentinck Street, 5th floor, Suite No 1E, Kolkata - 700 001.
M : +91 9831606060/9051606060
sanjay kumar dey
Dear all,
It may treated as tds on commission u/s 94H and tds @ 5% will be deducted in case it exceeds the limit of Rs. 15000.
Regards
CA Sanjay Dey
On Mon, 02 Jan 2017 12:23:01 +0530 ABHISHEK SARAF wrote
>Dear all,
Whether TDS is liable to be deducted toward Sales Incentive given to dealer in cash or in kind , over and above the Sales target achieved by the dealer.
>
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Dipjyoti Majumdar
Regards
CA Dipjyoti Majumdar
Kolkata
Soumyaranjan muduli
Dear Sir,
Please refer the Facts and issue: The assessee was a distributor of M/s. Sheela Foam Pvt. Ltd (‘SFPL’) for the state of Gujarat. SFPL was selling the goods to the assessee, who in turn was selling goods to the authorized dealers appointed by SFPL. The assessee had paid sales incentive to the dealers of SFPL on the basis of their performance and achievement of the sale target. Various dealers were given sales target and percentage of incentive was given on the basis of their performance/achievement of the sale target given to them. The AO treated the sales incentive paid as ‘commission’, liable to TDS under section 194H of the Act. As the assessee had not deducted any TDS, the AO made disallowance of Rs. 2.46 Crore under section 40(a)(ia) of the Act for non-deduction of TDS. The CIT(A) relied on the decision of the Bombay High Court rendered in the case of CIT vs. Intervet India Pvt. Ltd. (ITA No.1616 of 2011) and decided the issue in favour of the assessee.
Decision: The Tribunal upheld the observation of the CIT(A) that section 194H of the Act read with the Explanation makes it clear that the same shall become applicable, when the payment is received by a person who is acting on behalf of another or acting as an agent of another person. In the given case, the sales incentive was paid to the dealer based on their performance and achievement. The same cannot be equated with “commission”. The AO was therefore not justified in treating the payment of incentives to the dealers as well as to another distributor, as payment of commission liable to TDS under section 194H of the Act. Provision of section 194H are not at all applicable on the facts of the case.
Citation: Bombay Sales Corporation vs. DCIT [ITA No.2433/Ah
Dear all,Whether TDS is liable to be deducted toward Sales Incentive given to dealer in cash or in kind , over and above the Sales target achieved by the dealer.
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forum4ca is a Google Group of eServe online for the benefit of CA and other professionals. It is especially meant for written discussion & circulate information within group members. The mail may contain such research/advice/opinion/information/fact provided by any member and are subject to the accuracy and of the description of facts.The forum4ca, do not claim that contains in mail/information obtained after reading as a complete and accurate disclosure of relevant facts. Further this Group’s Owner/Moderator/Member are not liable for any damages or costs suffered due to action/transaction based on information on this Group.
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ABHISHEK SARAF
S K Choudhary
No
From: foru...@googlegroups.com [mailto:foru...@googlegroups.com] On Behalf Of ABHISHEK SARAF
Sent: 03 January 2017 13:01
To: foru...@googlegroups.com
Subject: [CA RUNGTA PD] Regarding TDS on Incentive
Whether TDS is liable to be deducted toward Sales Incentive given to dealer NOT IN cash or in kind BUT THROUGH CREDIT NOTE WHICH CAN BE ADJUSTED AGAINST FUTURE PUCHASE. , over and above the Sales target achieved by the dealer. Please give the case law also..
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