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2008 (12) TMI 436 - AT - Income TaxNon-deduction of tax at source - dairy business - milk sold to concessionaires - Revenue contended concessionaires to be agents and assessed difference between MRP of the product & purchase price to be commission - TDS u/s 194H - order passed u/s 201(1) and 201(1A) - HELD THAT:- In the present case it is found that there has been no redrafting of the agreements and the agreements as placed before us being the same as was found in the course of survey and as per the terms of the agreement which are identical even in 1993 as also in 2003, the discount as given by the assessee to its concessionaires are nothing but discount and do not have any characteristics of a commission. Consequently, we are of the view that the decision of the Hon’ble Jurisdictional High Court upholding the order of this Tribunal in the case of Delhi Milk Scheme [2008 (3) TMI 2 - HIGH COURT OF DELHI] would have no application to the assessee’s case insofar as the facts, as also the terms of the agreement are completely different. Further just because the assessee keeps a substantial control over the concessionaires it cannot be said that the relationship is one of principal and agent, as the control would have to be seen when these agreements were drafted. Obviously any body who gives his space, machinery and equipment to another would like to put substantial clauses which can be invoked to cancel such agreements if it is found that the person they are dealing with is not trustworthy or is doing anything to the detriment of the assessee. In such circumstances it cannot be said that the strict control clauses of the agreement makes the transaction between the assessee and the concessionaires to be one of principal and agent. If the actual functional and operational clauses of the agreements are seen it would clearly show that it is one between two principals to which the provisions of section 194H would not apply. In these circumstances, we are of the view that the provisions of section 194H would not be attracted on the discounts given by the assessee to its concessionaires and consequently the order of the ld. CIT(A) as also the AO passed u/s 201(1) and 201(1A) are set aside. Therefore, the appeal of the assessee is allowed.
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