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2015 (12) TMI 284 - AT - Income TaxWarehousing charges paid to C&F agents - whether were in the nature of commission liable for deduction of tax @ 10% u/s 194H or as ‘rent’ liable for deduction of tax @ 20% u/s 194I? - disallowance u/s 40(a)(ia) - Held that:- CIT(A) has appropriately considered the issue and held that the payments made to the C&F agents are in the nature of ‘Commission’, which fall for consideration under section 194H of the Act, though in the account books, the terminology used is ‘Warehousing Charges’. The case of the Assessing Officer is primarily based on the nomenclature of ‘warehousing charges’ used by the assessee to describe the payments made to C&F agents. The CIT(A) has noted the terms and conditions of the agreement with C&F agents as also the mechanics of the business of assessee. Assessee had explained that for the purpose of marketing its products, it appoints C&F agents at different places for clearing and forwarding of assessee’s goods. As per the assessee, the agreement with C&F agents, shows that there is a principal and agent relationship and it was not an agreement for taking the warehouse on rent. The factual findings arrived at by the CIT(A), which we have extracted above, clearly establishes that the services rendered by C&F agent are compensated by way of ‘Commission’ which is related to the sales made and, therefore, the payments have been rightly held to be subject to deduction of tax at source u/s 194H of the Act at the rate of 10%. The Revenue has not lead any material/evidence before us to establish any error in the finding of the CIT(A), which we hereby affirm. - Decided against revenue.
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