TMI Blog2010 (5) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... raises the issue about non-reduction of TDS under section 194H by following grounds : "On the facts and in the circumstances of the case as well as in law, the learned CIT(A) has erred in (1) holding that the transaction between the assessee and the concessionaires is a principal-to-principal transaction and not principal to agent transaction; (2) holding that the payments made by the assessee to its concessionaires for selling milk/milk products is not commission as defined under section 194H of the IT Act, 1961; (3) not correctly appreciating the terms of the agreement and conduct of the parties in holding that the relationship between the assessee and concessionaires is that of principal-to-principal." 3. Ld. DR relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts to such vendors on the basis of above agreements on various stipulations. The goods are sold to such vendors at a lesser price than MRP on the sale of goods on principal-to-principal basis. These vendors never act as agents of the assessee and no commission is paid to them. The actual sale price on which the goods are sold to these vendors is credited as sale proceeds and not on the basis of MRP with separate commission payment. ITAT in the above order, which is in the case of Mother Dairy India Ltd. v. ITO [2009] 28 SOT 42 (Delhi), after considering the Hon ble Delhi High Court in the case of Delhi Milk Scheme v. CIT [2008] 301 ITR 373, has clearly held that assessee s case do not fall under section 194H as the relationship wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the difference between Maximum Retail Price (MRP) and the Sale price charged by the appellant as "commission" to the concessionaires which is liable to deduction of tax at source under section 194H of the Act. In fact, the CIT(A) has failed to appreciate that the ownership in goods sold vested with the Concessionaires when the sales were made to them and such stocks could be utilized by them in any manner whatsoever." The other issue raised in assessment year 2004-05, which is also common in assessment year 2005-06, is as under : "That on the facts and the circumstances of the case and in law, the CIT(A) has erred in upholding the findings of the learned Assessing Officer that the payment (amounting to Rs. 1,27,60,358 for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "We have carefully gone through the decision relied upon by counsel but find it difficult to accept the submission made by her. In the case of Anandam Viswanathan [1989] 73 STC 1 (SC) the work entrusted to the assessee was printing of question papers for universities. The question was whether such printing work could be treated to be a simple case of contract for sale of goods. Answering the question in the negative, the court held that printing of question papers at the behest of a university or educational institution is a delicate and confidential type of work and the price paid for supplying such printed question papers or printed matter entails primarily the confidence and secondly the skill and to a very small extent the material. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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