TMI Blog2015 (12) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. The CIT(A) has noted the terms and conditions of the agreement with C&F agents as also the mechanics of the business of assessee. Assessee had explained that for the purpose of marketing its products, it appoints C&F agents at different places for clearing and forwarding of assessee’s goods. As per the assessee, the agreement with C&F agents, shows that there is a principal and agent relationship and it was not an agreement for taking the warehouse on rent. The factual findings arrived at by the CIT(A), which we have extracted above, clearly establishes that the services rendered by C&F agent are compensated by way of ‘Commission’ which is related to the sales made and, therefore, the payments have been rightly held to be subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduct tax at prescribed as per the provisions of section 194J of the IT Act. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of ₹ 71,83,663/- made by the AO u/s. 40(a)(ia) of the Act without appreciating the department has not accepted the decision of the Hon ble ITAT and appeal of the Hon ble Bombay High Court has been filed in the case of Hindustan Thomson Associates (I) Ltd. for A.Y. 2005-06 2006-07. 3. Briefly put, the relevant facts are that assessee is a Company incorporated under the provisions of the Companies Act, 1956, and is engaged in the business of trading in Cosmetics and Toiletries, which are got manufactured from Vendors under assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company i.e. J K Helence Curtis Ltd is given as care of those agents. For eg. One of its agents is Vihira Traders in Ahmedabad. The assessee s goods were first transported from its premises in Thane to the godowns of Vihira Traders at Ahmedabad and then from there the same were dispatched to its various clients. The relvant invoices in the letter pad of J K Helence Curtis Ltd were prepared by that agent on behalf of the assessee company. The address of the assessee company given thereon was that of Vihira Traders [ mentioned as C/o Vihira Taders, 4, Keshavial Estate, Bypass Highway Aslali 380013]. Thus it is very clear that the services rendered by M/s Vihira Traders was that of C F Agent and therefore the payment made to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. 8. We have carefully considered the rival submissions. In the present case, the stand of the Assessing Officer is that tax was liable to be deducted on the impugned payments at the rate of 20% under section 194I of the Act, and not @ 10% deducted by the assessee as per section 194H of the Act. For this reason, as per the Assessing Officer, the corresponding expenditure is disallowable u/s 40(a)(ia) of the Act. 9. In this regard, we find that the CIT(A) has appropriately considered the issue and held that the payments made to the C F agents are in the nature of Commission , which fall for consideration under section 194H of the Act, though in the account books, the terminology used is Warehousing Charges . The case of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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