Supreme Court of India

Bharti Cellular Limited (now Bharti Airtel Limited) v. Assistant Commissioner of Income Tax, Circle 57, Kolkata and Another

Neutral citation

Bench Sanjiv Khanna and S.V.N. Bhatti JJ.

Decided 28 February 2024

INSC stands for INDIAN SUPREME COURT. A neutral citation scheme assigned by the Court itself, so a judgment can be cited without depending on a commercial law reporter. INSC is the neutral citation scheme assigned by the Supreme Court, so a judgment can be cited without depending on a commercial law reporter.

2 Supreme Court benches have cited this judgment.

What the Court ordered

We hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or while selling/transferring the pre-paid coupons or starter-kits to the distributors.

Judgment, page 38

From the headnote

Issue for Consideration The liability to deduct tax at source u/s.194- , Income Tax Act, 1961 on the amount which, as per the Revenue, is a commission payable to an agent by the assessees-cellular mobile telephone service providers under the franchise/distributorship agreement between the assessees and the franchisees/distributors. Headnotes Income Tax Act, 1961 – s.194- – When not attracted – Assessees entered into franchise or distribution agreements and sold start-up kits, recharge vouchers at a discounted price to the franchisee/distributors – As per Revenue, the difference between…

Authorities it was built on

2022 Securities and Exchange Board of India v. Sunil Krishna Khaitan and Others cited by 5
1977 Bhopal Sugar Industries Ltd. v. Sales Tax Officer, Bhopal cited by 3
2018 The Director, Prasar Bharati v. Commissioner of Income Tax, Thiruvanthapuram cited by 2
2022 Singapore Airlines Ltd. v. C.I.T., Delhi cited by 2

Where later benches applied it

2026 Ht Media Limited v. Principal Commissioner Delhi South Goods and Service Tax referred to
2025 Union of India & Others v. Future Gaming Solutions Pvt. Ltd. & Another Etc. referred to

Of those, 2 referred to

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