TMI Blog2008 (12) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, as also the terms of the agreement are completely different. Further just because the assessee keeps a substantial control over the concessionaires it cannot be said that the relationship is one of principal and agent, as the control would have to be seen when these agreements were drafted. Obviously any body who gives his space, machinery and equipment to another would like to put substantial clauses which can be invoked to cancel such agreements if it is found that the person they are dealing with is not trustworthy or is doing anything to the detriment of the assessee. In such circumstances it cannot be said that the strict control clauses of the agreement makes the transaction between the assessee and the concessionaires to be one of principal and agent. If the actual functional and operational clauses of the agreements are seen it would clearly show that it is one between two principals to which the provisions of section 194H would not apply. In these circumstances, we are of the view that the provisions of section 194H would not be attracted on the discounts given by the assessee to its concessionaires and consequently the order of the ld. CIT(A) as also the AO pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary licenses for running the booths are obtained by the concerned concessionaires. It was the submission that the assessee sells its products to the concessionaires who then sell the same to the customers on retail. He drew attention to pages 39 to 53 of the paperbook as also pages 78 to 96 of the paperbook which were copies of the agreements entered into between the assessee and the concessionaires. The agreement at pages 78 to 96 was a copy of the agreement of September 1993 and the agreement at pages 39 to 53 was the agreements entered into in January, 2003. He submitted that the agreements of both 1993 and 2003 were identical and these were also the agreements, which had been found in the course of the survey. He further drew attention to various clauses of the agreement of 2003 more specifically clause 25 of the agreement to show that the concessionaires has to pay the sale price of the various products on receipt of the same from the assessee. He further drew attention to clause 26 which stated that the full sale consideration has to be paid immediately through account payee cheques from his own bank account only. He further drew attention to clause 28 which specified th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 rupee 80 paise. The second circular of 14-9-2002 was in English, which has been addressed to all retailers (insulated containers/HAVA). In the said Circular it is mentioned that the commission on the bulk vended tonned milk has been revised from 20 paise per liter to 40 paise per litre. He further drew attention to the sale invoice- cum -delivery challan copies at pages 4C and 4D wherein sales tax has been collected by the assessee on the basic price. These invoices are of September 2003 and related to Lodhi Colony and Kidwai Nagar East. He also drew attention to pages 56 and 57 of the paperbooks, which were copies of the sale invoice/delivery challan in regard to various categories of milk supplied on which no sales tax has also been levied. It was the submission that no sales tax was leviable on the said milk as per the said invoice which was of 2008 March. It showed the basic price for one liter milk at Rs. 17.80 paise whereas the selling rate as per the market rate is Rs. 19 per litre. Thus leaving a margin of Rs. 1.20 the market rate or the MRP has not been mentioned in the sales invoice/delivery challan of March, 2008. It was thus his submission that as per the delivery ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch was not the case and right from 1993 till today the intention had been to deal with the concessionaires on a principal-to-principal basis. It was thus the submission that the decision in the case of Delhi Milk Scheme ( supra ) did not apply to the assessee s case and the ld. CIT(A) was wrong in saying that the distinguishing factors as pointed out between the case of Delhi Milk Scheme ( supra ) and that of the assessee were minor and they were more of form and not substance. 5. In reply, the ld. DR vehemently supported the orders of the Assessing Officer and the ld. CIT(A). It was the submission that the assessee supplied all the equipment for the dispensation of the milk and milk products and the other products of the assessee through the booths owned by the assessee to the concessionaires and the concessionaires were acting only as the agents of the assessee. It was the submission that the concessionaires had to function according to the strict terms and condition imposed by the assessee company and they were also subject to daily monitoring by the assessee company. It was the further submission that even the registers are maintained by the concessionaires as per inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the agreement also clearly show that the concessionaires have responsibility to keep the milk under the necessary refrigerated conditions. The terms of the agreement also clearly show that the milk once sold to the concessionaires would be the exclusive property of the concessionaires and the same would not be taken back under any condition. This would clearly mean that if the milk is spoiled, the loss on the same would be to the cost of the concessionaires. Liberty has been retained with the concessionaires to have the sample of the milk collected in the presence of the delivery staff and to test the same at its own cost or to get the same tested free of cost by the assessee s laboratory. Similarly the assessee has also retained the right of inspection and collection of sample milk and checking its quality and quantity in regard to the concessionaires at any time. Any variation/deterioration in the quality or quantity of the milk sold by the concessionaires would result in termination of the agreement. A perusal of the invoice as raised on the concessionaires also clearly shows that sales tax has been collected by the assessee on the basic price. Obviously, sales tax is leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to be sold by the agents/concessionaires on commission . The ownership of milk booths would rest with DMS and that DMS would not charge any rent from the agents. The unsold milk from the agents would be taken back by DMS. The agents were barred from selling any other product of any other brand. The sale collections were collected by cash clerk of DMS from these booth operators. As per para 4.1(2) of the agreement the concessionaires shall have no right, title or interest over the said milk booth and other items provided/to be provided in the said milk booth from time to time and shall not claim any right whatsoever in respect of the said milk booth or any part thereof. Further, in sub-para 3 of para 4.1 of the agreement it is mentioned that the possession and control of the said milk booths as also other property movable/immovable of the said booths shall be with DMS and DMS shall always have the right to enter the said milk booths and take over the charge thereof at any time without any reason and without any intimation to the concessionaire. In addition thereto Shri Ram Swaroop, Manager (Distribution) in a sworn statement in reply to the question of the Assessing Officer spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst time before the CIT(A) cannot be accepted in evidence being in genuine. Whereas, on the basis of agreement/appointment letters executed between the assessee and agents/concessionaires duly certified by the manager of DMS and given to the department during the course of the survey it is established by the department that the milk and milk products and the milk booths were owned by DMS; unsold milk was taken back by DMS from the agents/concessionaires and the cash collection was daily handed over to DMS by the agents and lastly the agents simply rendered services for selling milk to the customers and the ownerships of the goods did not pass over to the agents/concessionaires as there was no sale to the agents/concessionaires." 9. Thus it was after considering the agreements found in the course of survey and the redrafted agreement, this Tribunal had come to a conclusion in the case of Delhi Milk Scheme ( supra ) that the transaction between Delhi Milk Scheme and its concessionaires was in fact one to which the provisions of section 194H attracted. In the present case it is found that there has been no redrafting of the agreements and the agreements as placed before us bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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