Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2008 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (3) TMI 686 - HC - Income TaxPayment of commission for export of wheat - Relationship between "Principal and Agent or not" - Liability to deduct tax at source u/s 194J? - default within the meaning of Section 201(1)/(1A) - HELD THAT:- A perusal of clauses clarifies that during the financial year, the relationship between M/s. PEC and assessed was that of Principal and Agent. It is clear from the Clause 6 that M/s. PEC had transferred its wheat export L/Cs in favor of the assessed for execution of the wheat export and M/s. PEC charged commission for the export. Therefore, it can be said that M/s. PEC Ltd. transferred foreign buyers L/Cs in favor of the assessed against commission charges. As per Clause 4 of agreement, the assessed agreed that the quantity of wheat delivered by FCI for the purpose of export against the export contract shall be exported in full to the foreign buyer and will not be sold in domestic market. All important works is being done by the assessed and M/s. PEC had transferred a simple contract of supplies to the assessed against the payment of commission and M/s. PEC was not rendering any kind of professional/technical services. Thus, the provision of Section 194J of the Act is not applicable. It is clear that the amount paid by assessed to M/s. PEC was not towards fee for professional or technical service. Therefore, the provisions of Section 194J of the Act are not applicable to the facts of the present case and the assessed is not liable to deduct tax at source on this amount under Section 201/201(A) of the Act. Therefore, we do not find any infirmity in the impugned order passed by the Tribunal and thus in our opinion no substantial question of law arises for consideration. The appeal filed by the Revenue is hereby dismissed.
|