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2018 (10) TMI 1165 - AT - Income TaxTDS u/s 194H - non-deduction of TDS on credit notes on account of sales promotion expenses - free or concessional foreign trips - addiional benefit scheme - addition invoking provisions u/s 40(a)(ia) - CIT(A) found the entire impugned amount is in the nature of reimbursement or incentive and held that the AO is wrong treating the entire expenditure as commission - principal and agent relationship - Held that:- As observed from sample copies of schemes which shows that the scheme of Annual Purchase Bonanza-2011 is being operated by the C&F agents/stockist of M/s Creative Technotex Pvt. Ltd. of respective region and they are responsible for timely distribution of scheme awards. It is seen wherein the names of CNF agents are provided and amounts of their contribution is reflected against their names. Total contribution of C&F agents towards the above said scheme was ₹ 31,51,713/- as pointed out by the CIT(A) in his order at page No.7. Ld. AR pointed to the page No.26 as it is a LPG distributor scheme reimbursement form of AP Traders of Kanpur placed at Sl.No.1 in the list at page No.25 containing the names of oil companies, schemes entitled, quantity & cost of gift, total value scheme and their respective contributions. The said form shows total value of scheme is ₹ 1,05,000/- and half of it i.e. 50% is ₹ 52,500/- was born by the assessee and its contribution of ₹ 52,500/- was credited to ledger account of C & F agent under the sales promotion vide credit note. Therefore, we find force in the arguments of ld.AR that it is not a commission and there is no principal and agent relationship. It is a sales promotion to grow simultaneously. It is a benefit to the distributor and assessee has no relationship with the distributor. We find from page No.88 of Paper Book that the assessee incurred foreign trip expenses to an extent of ₹ 11,18,000/- and the credit notes. As discussed above regarding the sample we note that a trip to Thailand offered to one person on achieving sale of 75 boxes or 2700 pieces and in our opinion, it is not a commission and is additional benefit given to the C&F agents. Case of COMMISSIONER OF INCOME-TAX (TDS) VERSUS UNITED BREWERIES LTD. (SUCCESSOR TO UNITED MILLENIUM BREWERIES) [2016 (11) TMI 718 - TELANGANA AND ANDHRA PRADESH HIGH COURT] followed. - Decided in favour of assessee.
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