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- It was noted that provision of section 194H to deduct tax was applicable only to a person who was responsible for paying, at time of credit to account of payee or at time of payment - Whether, since assessee did not perform any act of paying but was only receiving payments from these collection centres, there was no obligation on assessee-company to deduct tax at source under section 194H on discount so allowed - Held, yes [In favour of assessee] 3.7. Similarly in yet another decision of Hon‟ble Jurisdictional High Court in the case of CIT vs Qatar Airways reported in 332 ITR 253 (Bom), the same decision was rendered. The facts of that case and decision rendered thereon are reproduced herein for the sake of convenience :-

o Para 36 - practicality and feasibility of making the deductions o Argument that assessee doesn't know the commission has not been accepted by the Hon'ble SC.

o Para 37, 43, 51- Qatar Airways decision of Hon'ble Bombay HC 332 ITR 253, has been negatived. • Para 42 - Assessee cannot be absolved from its statutory duties under Section 194H, irrespective of the viability of operating in this manner.

• Para 44 - Lack of control over pricing does not determine principal - agent relationship.

Thus, the assessee humbly submits that the decision rendered by Hon'ble SC in specific context of the facts of the airline industry. It is because of the BSP that the airlines are aware of the ultimate price at which the agent sells the tickets. However, there is no such system in the telecom industry. The assessee is neither aware nor concerned about the price at which the distributor sells it vouchers to sub-distributors or retailers. Further, the assessee submits that Hon'ble SC, in the context of peculiar facts of airline industry, has noted that these facts were not before Hon'ble Bombay High Court in case of Qatar Airways and it does not universally overrule the principles laid down in the said case of Qatar Airways, which has been followed by Hon'ble ITAT in case of Idea Cellular Ltd. in AY 2008-09.

3.28. From the perusal of the aforesaid paragraphs quoted from the decision of the Hon‟ble Supreme Court in the case of Singapore Airlines Ltd, we find that in the case of airline industry, there is an operation of Billing and Payment Settlement (in short "BSP") where financial data regarding the sale of tickets are stored and BSP collects the data from multiple transactions and furnishes the details of tax to be deducted by the agents by transmitting the same twice a month or bimonthly. From the data available in the BSP, the air carriers must simply calculate the accumulated amount of TDS at the end of each month and make a single comprehensive deduction thereon. Since, it was practicable in that case to determine the amount of TDS based on the data provided in the BSP which is peculiar only to airline industry, the Hon‟ble Supreme Court held that the air carrier cannot be absolved from its liability of deduction of tax at source in terms of Section 194H of the Act on the ground that no payment is made by the air carrier to the agent. In fact, in para 43 of the said decision reproduced supra, there is a categorical finding that the airlines may utilise the BSP to discern the amounts earned as supplementary commission and deduct TDS accordingly is an internal mechanism that facilitates the implementation of Section 194H of the Act. It also goes on further to hold that this specifics of the BSP system prevailing in the airline industry was not placed before the Hon‟ble Bombay High Court in the case of Qatar Airways Ltd. To that extent, the decision of the Hon‟ble Bombay High Court in the case of Qatar Airways Ltd stands overruled by the decision of the Hon‟ble Supreme Court. In other words, the decision rendered by the Hon‟ble Bombay High Court in the case of Qatar Airways Ltd would still hold the field as far as the M/s. Vodafone Idea Ltd.,(As successor to Spice Communications Ltd.) telecom industry is concerned where the system like BSP which determines the payment of commission is not available. As stated earlier, the BSP system is peculiar and available only to airline industry. In the case of telecom industry i.e. the assessee case before us, there is no mechanism to determine at what rate the distributor will be able to ultimately sell the prepaid simcards to the retailers so as to enable the assessee to determine the TDS component on sale of prepaid simcards. Hence, the concept of no payment made by the assessee resulting in no TDS thereon as was held in the case of Qatar Airways Ltd by the Hon‟ble Jurisdictional High Court would still be applicable to the telecom industry and the same would not be applicable only for airline industry. This fine line of distinction is provided in the decision of the Hon‟ble Supreme Court itself in the paragraphs reproduced hereinabove.