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2022 (2) TMI 1320 - AT - Income TaxTDS u/s 194H OR 194J - Payment made to Thyrocare Services Providers (TSPs) to collect samples from the patients - Assessee has made arrangement with Thyrocare Services Providers (TSPs) to collect samples from the patients As per the terms and conditions of the agreement, the TSPs collects the samples from the patients and sends the same to the assesssee for testing - assessee raises periodical invoices on the TSPs against which the TSPs make payment to the assessee after deducting Tax at Source (TDS) - HELD THAT:- It is an admitted fact that the TSPs have option to forward the specimen samples for testing, either to the assessee or any other specialized testing laboratory. TSPs are not under obligation to send every sample for testing to the assessee unless the patients/customers specifically ask the TSPs to send the samples to the assessee for testing. The assessee is remunerated for the testing services provided to the TSPs at an agreed rate. The assessee raises periodical invoices on the TSPs. The TSPs make payment to the assessee after deducting TDS under section 194J of the Act for rendering professional services. What emanates from the submissions made by ld. AR and the supporting documents is, it is the TSPs who are the payers and not the assessee. The assessee is a recipient of the amount for providing testing services to the TSPs. The assessee receives the payment on the basis of periodical invoices raised on TSPs, the TSPs make payment to the assessee after deducting TDS under section 194J of the Act. Thus, the findings of the AO are contrary to the facts, the AO) on presumptions, surmises and conjectures has entirely made out a new case by reversing the payer and payee. AO has erred in observing that the assessee is a payer and the TSPs are recipients of the amount. The AO further erred in holding that since the assessee is making payment to the TSPs, the assessee was under obligation to deduct TDS under section 194H of the Act on commission paid to the TSPs. Thus, from the above facts, it is unambiguously clear that the case of Revenue was build up on wrong appreciation of facts. The CIT(A) after having examined and appreciating the correct facts in para-5.5 of the impugned order has rightly observed that the TSPs do not receive any payment from the appellant, rather the TSPs make payment to the appellant as per invoices raised by the appellant for the tests done by it. The ld. DR has failed to controvert the above observation of the CIT(A). - Decided against revenue.
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