TMI Blog2018 (11) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon - Statutory Audit Report is final conclusion over the authorities - Decided in favour of the assessee - D.B. Income Tax Appeal No. 89/2018 - - - Dated:- 24-7-2018 - Mr. Justice Kalpesh Satyendra Jhaveri And Mr. Justice Vijay Kumar Vyas For the Appellant(s) : Mr. Prateek Kedawat for Mr. R.B. Mathur For the Respondent(s) : Mr. Sanjay Jhanwar JUDGMENT 1. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby tribunal has dismissed the appeal of the department. 2. Counsel for the appellant has framed following substantial question of law:- 1. Whether in the facts and circumstances of the case, the Tribunal was justified in holding that whether the assessee is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d taking into account the provisions of Section 194H, the Tribunal while considering the evidence on record, in our considered opinion, has misdirected itself in considering the case from an angle other than the angle which was required to be considered by the Tribunal under the Income Tax Act. The Tribunal has travelled beyond the provisions of Section 194H where the condition precedent is that the payment is to be made by the assessee and thereafter he is to make payment. In spite of our specific query to the counsel for the department, it was not pointed out that any amount was paid by the assessee company. It was only the arrangement by which the amount which was to be received was reduced and no amount was paid as commission. 46. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding MRP, the findings which are arrived at is a price which has been fixed by the assessee company and other expenses, namely; commission given to the retailer and everything is to be managed by the Distributor. In that view of the matter, the restrictions which are put forward will not decide the relation-ship of Principal and Agent. (iii) The Distributor has all rights to reduce his margin. He can increase the margin of retailer and will reduce the margin from 10% to anything between 1% to 10%. There is no restriction by the assessee to give commission amount to the retailer. (iv) Regarding area of operation, it is the business policy of the assessee to give Distributor-ship for a particular area. Only on that basis, it will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orld to promote the sale, if the Distributor is not given any encouragement, the business will not grow. In that view of the matter, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builders Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC). (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Distributor is not an agent, therefore, in our considered opinion, the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52. Regarding the other appeals of Cellular Companies the questions are required to be answered as discussed hereinabove. The relationship is not of agent. It is principal to principal basis. The payment is received by the company and the amount of commission is never paid to the agent or the Distributor. Therefore, no TDS is required to be deducted. We also accept the contention raised by Mr. Jhanwar that even otherwise in view of divergent judicial views, one in favour of the assessee is required to be adopted as per settled law. Taking into consideration the above conclusion, the first issue is required to be answered in favour of assessee. 53. Regarding Section 194J of the Act, in view of the Kerala High Court decisions, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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