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2011 (12) TMI 84 - AT - Income TaxTDS u/s 194H - Discount versus Commission or brokerage - the business working of the assessee is that it signs agreements with the Collection Centres, on a non-exclusive basis. It is under these agreements, that the Collection Centres avail the professional services of the assessee regarding testing of samples. These Centres operate as authorized Collectors for collecting the samples. - held that:- We hold that (i) there is no Principal-Agent relationship between the assessee and the Collection Centres and that being so, the provisions of section 194H of the Act have been wrongly invoked; (ii) The provisions of section 194H of the Act could, even otherwise, not have been met, since no payment has been shown to have been made by the assessee to the Collection Centres; (iii) The payment made to the assessee by the collection Centres was at the rates agreed to inter se between them; and (iv) The ld. CIT(A) erred in confirming the 'disallowance of ₹ 11,78,24,030 made u/s 40(a)(ia) of the Act for the alleged failure of TDS by the assessee u/s 194H of the Act. - Decided in favor of assessee.
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