Krishnaswamy Yoganandan, Chennai vs Ito, Chennai on 23 February, 2022
"When the TDS is to be made for a transaction between
assessee company and payee, those provisions are only to be
reckoned i.e. the moment commission is paid to franchisees,
relevant TDS provisions are only applicable but not what will
happen subsequent to payment to franchisee. Subsequent TDS
payment by franchisee is the issue to be adjudicated in the
case of a franchisee and not in this case. For example, if a
person awards a contract to one person, Act says that 2% of
that amount is to be deducted, even though the contractor
again gives it as subcontractor to other person. When, a
contractor gives the same as sub-contract 1% of TDS is to be
made by him again and the original person who awards the
contract cannot say that he will deduct only 1% of the receipts
as TDS because the contractor is further giving it as sub-
contract. The two transactions lire separate and independent
and hence the Assessing Officer is correct in applying section
194H for the entire amount. In this connection, I rely on
commission paid by travel again to its agent selling airlines
tickets on his behalf but also as an agent discount and special
commission passed on to them. Thus TDS to be deducted on
whole amount. CIT vs Dex Travel (P) Limited 172 TM 142 Del).
While assessee company is giving Sim cards/recharge coupons
to various franchisees at reduced rate and correctly treated it as
"commission".