ITAT Jaipur says Franchisee Profit Remittances Not Liable for TDS under Section 194J

The Jaipur ITAT dismissed the Revenue’s appeal against deletion of a Section 201 demand arising from non-deduction of TDS on amounts transferred to three IMFL brand owners. Following its decision for earlier years, the Tribunal accepted that the amounts represented the balance profits attributable to the respective brand owners under the manufacturing arrangements, rather than consideration for technical services. Section 194J was therefore held inapplicable.