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2011 (1) TMI 1035 - HC - Income TaxTDS - assessee defaulted in not deducting the tax at source on the amount of commission paid to the distributor - Held that:- As it is evident that the distributor was to purchase products at pre-determined price from the assessee for selling the same within specified area. The products were to be purchased by the distributor against 100 per cent. advance payment or may be some times on credit at the discretion of the assessee. Both the assessee and the distributor have been collecting and paying their sales tax separately. Both the parties have clearly understood and accepted the agreement between them. That being the arrangement between the assessee and the distributor, it could not be said that the relation between them was that of principal-agent. On the other hand it was clearly stipulated to be an agreement between them on principal-to-principal basis - no infirmity in the findings of the CIT(Appeals) and also ITAT in concluding that the payment given by assessee to the distributor is nothing but a discount and did not have the characteristics of commission - appeal has no merit and is hereby, dismissed.
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