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2014 (1) TMI 230 - AT - Income TaxNon-deduction of TDS - Assessee in default u/s 201(1) - Held that:- Following Hindustan Coca Cola Beverages Pvt Ltd Vs CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] - In order to hold the assessee is liable for deducting tax at source under section 194H of the Income-tax Act, 1961, whether the relationship between the assessee and its franchisees created by the agreement is of a principal and agent has to be gathered from the nature of the contract, its terms and conditions, and the terminology used by the parties is not decisive of the relationship - The court is to examine whether after delivery of the goods to the buyer, the seller has retained the control or right of regulation in any form with regard to the mode of dealings of the buyer, in other words, whether the buyer has substantially unfettered choice to deal with the property purchased in any manner he likes - Sometimes the seller under the contract or enactment prescribes certain regulatory measures to prevent abuse of the rare articles and goods even after sale but such measure cannot be ascribed to be attributes of the relationship of principal and agent - Once the recipients have paid tax on income embedded in these payments then the tax cannot once again be recovered from the assessee by treating the assessee in default for non deduction of TDS - The issue was restored for fresh adjudication.
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