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2013 (11) TMI 1551 - AT - Income TaxTds liability - assessee was observed to have paid 'blood processing charges' - (AO) was of the view that the said payment stood covered u/s. 194J - Held that:- From the copy of the receipt issued by the blood bank and the above reply of the blood bank, it is evident that payment is made by the patient or his relatives to the blood bank and not the assessee. It is settled law that the entries in the books of account are not decisive. It is the substance of the transactions which is to be seen. When the assessee did not make any payment to the Blood Bank, the question of affixing the liability u/s 194J upon the assessee, does not arise. - Decided in favour of assessee. Applicability of provisions of section 192 or section 194J in case of retainer doctors - Held that:- Considering the facts of the assessee's case in the light of the agreement between the assessee and the retainer doctors, learned Accountant Member rightly held that the fixed monthly remuneration payable to retainer doctors is in the nature of salary liable for deduction of tax under Section 192 of the Income-tax Act. - Decided against assessee. Mark up/profits earned by Fortis Health World Ltd. (FHWL) on sale of medicines to the assessee - whether is a commission chargeable to tax under section 194H or is a sale on which provisions of section 194H are not applicable? - Held that:- The agreement has to aspects - one is with regard to sale of the medicines by FHWL to the assessee. As per the agreement, FHWL is to sell the medicines at cost plus certain markup which has been fixed on the basis of turnover as given in paragraph 2.2 of the agreement. The second aspect is the providing of the manpower by FHWL to the assessee for smooth running of their pharmacy. However, as per Paragraph 2.6 of the agreement, all expenses incurred by FHWL on the employees and the smooth running of IPP Pharmacy are to be reimbursed by the assessee to FHWL on monthly basis. Thus, FHWL is not charging anything for providing the manpower for running the IPD Pharmacy. On the above facts, in my opinion, it cannot be presumed that the markup on the sale of medicines is to be treated as consideration for providing the manpower by FHWL to the assessee. Paragraph 2.2 of the agreement is very clear that FHWL is to sell the medicines to the assessee at purchase cost plus certain markup. Merely because the sale price is fixed as per the agreement between the parties, it cannot be said that the difference between the purchase cost and the sale price i.e. the markup is the commission for sale of medicines. The sale price charged by FHWL i.e., cost plus markup is the price of the medicines sold by FHWL to the assessee. Therefore, the stand of the Revenue that the markup is the commission cannot be accepted. Similarly, the view of the learned Accountant Member that the markup is a consideration for providing the manpower is also based upon the presumption and contrary to the express provisions of the agreement. - Decided against revenue.
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