TMI Blog2011 (1) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... ngement between the assessee and the distributor, it could not be said that the relation between them was that of principal-agent. On the other hand it was clearly stipulated to be an agreement between them on principal-to-principal basis - no infirmity in the findings of the CIT(Appeals) and also ITAT in concluding that the payment given by assessee to the distributor is nothing but a discount and did not have the characteristics of commission - appeal has no merit and is hereby, dismissed. - ITA NO 399/10 - - - Dated:- 6-1-2011 - SIKRI A. K., MEHTA M. L., JJ. Judgment: M. L. Mehta J.- 1. This appeal has been preferred under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and that the payment given by assessee to the distributor is nothing but a discount and did not have the characteristics of commission. 4. The present appeal is preferred against the impugned order of the Income-tax Appellate Tribunal. The admitted facts, as noted above are not in dispute. The only question that arises for consideration is as to whether as per the agreement entered into between the assessee and the distributor and the payments made by the assessee to the distributor constitute com-mission as envisaged under section 194H, and whether the assessee was liable to deduct TDS. The entire dispute centred around the interpretation of the agreement entered into between the assessee and the distributor. The Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as being on principal-agent basis. 6. The learned counsel appearing for the Revenue relied upon the case of CIT v. Idea Cellular Ltd. [2010] 325 ITR 148 (Delhi) ; 2010-TIOL-193-HC-DEL-IT. That was the case relating to the distributorship of prepaid cellular telephones by the assessee through distributors called prepaid market associates. Since in that case the overall control and also the ownership of the SIM cards remained with the assessee and the transaction in question was not that of sale and purchase, the court held that keeping in mind the nature of service provided by the assessee to the ultimate consumer, a relationship is established between the assessee and the ultimate consumer. Distinguishing the legal positions, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re including requisite staff under its employment with liability of PF contribution, ESI contribution, etc. as per the laws. It was specifically stated in clause 16 that the arrangements under this agreement are on principal-to-principal basis and nothing in this agreement shall be construed to confer the authority of an agent to bind the assessee. In clause 17 it was specifically mentioned that the distributor was to purchase the products of the assessee and was to be allowed discount per case on the printed MRP. In case of any breakage, leakage, etc., it was the distributor who was liable and not the assessee. Not only this, even all the approvals, consents, registrations, licences, etc. whatever may be required from Departments or author ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
