2010 (4) TMI 1057 - AT - Income Tax

Summary

Issues Involved: Appeal against order u/s 201(1)/201(1A) of the Income Tax Act, 1961 for F.Y. 2004-05.

Issue 1: Determination of nature of transaction between assessee and concessionaires.
The revenue challenged the CIT(A)'s decision that the transaction was principal to principal, not principal to agent. The AO imposed tax liability u/s 194 H on concessionaires' margins, treating them as "commission." The Tribunal had previously ruled in favor of the assessee for F.Y. 2003-04, stating that section 194 H did not apply. As the Tribunal's decision for the earlier year had not been overturned, the CIT(A) rightly followed it for the current appeal, upholding the assessee's case.

Issue 2: Classification of payments to concessionaires.
The revenue contested the CIT(A)'s ruling that payments to concessionaires for selling milk/products did not constitute "commission" u/s 194 H. The AO had imposed tax liability and interest u/s 201(1A) based on treating the margins as commission. However, following the Tribunal's decision from the previous year, the CIT(A) correctly set aside the AO's order, as the Tribunal had held that section 194 H did not apply to the present case. Consequently, the appeal filed by the revenue was dismissed, affirming the CIT(A)'s decision.

Conclusion: The Tribunal upheld the CIT(A)'s decision, relying on its earlier ruling for F.Y. 2003-04, which determined that the provisions of section 194 H did not apply to the transaction between the assessee and concessionaires. The revenue's appeal was dismissed, and the order of the CIT(A) was upheld based on the Tribunal's previous decision.