TMI Blog2020 (12) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... ct would automatically become invalid. That being the case, the impugned order dated 28th December 2016 passed under section 201(1)/201(1A) r/w 263 of the Act will automatically lose its existence. TDS u/s 194H - Commissioner (Appeals) correctly held that the transaction between the assessee and the stockiest is in the nature of sale. Therefore, there is no need to deduct tax at source under section 194H of the Act on margin allowed to the stockiest as provisions of section 194H of the Act would not be applicable to the margin allowed to the stockiest. - ITA no.534/Mum./2019 - - - Dated:- 27-11-2020 - Shri Saktijit Dey, Judicial Member And Shri N.K. Pradhan, Accountant Member For the Assessee : Shri V. Sreekar, CIT(DR) Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modus operandi of the assessee, the stockiest places orders and goods are transferred to the clearing and forwarding agent. The clearing and forwarding agent books and dispatches the goods to stockiest against cheques received by them. Being of the view that the payments made to stockiest is in the nature of commission, hence, subject to TDS under section 194H of the Act, the Assessing Officer issued show cause notice to the assessee. After perusing the explanation of the assessee, the Assessing Officer concluded that stockiest s margine is 2% of the sales. Since the assessee had not deducted tax on the stockiest s margin, the Assessing Officer treated the assessee as an assessee in default under section 201(1) of the Act and raised tax dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id and has been set aside. Accordingly, he held that the order passed under section 201(1)/201(1A) of the Act in pursuance to the order passed under section 263 of the Act has become infructuous. Therefore, he decided the appeal in favour of the assessee. 5. We have carefully considered the rival submissions and perused the material placed on record. Insofar as the basic facts are concerned, there is no dispute that on 26th March 2014, the Assessing Officer has passed the order under section 201(1) / 201(1A) of the Act raising a demand of ₹ 2,76,70,576, by computing the TDS liability on stockiest s margin determined at 2% of the gross sales. The aforesaid order of the Assessing Officer was subjected to proceedings under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source under section 194H of the Act on margin allowed to the stockiest. In other words, learned Commissioner (Appeals) held that the transaction between the assessee and the stockiest is on principal to principal basis, hence provisions of section 194H of the Act would not apply. Pertinently, the aforesaid decision of learned Commissioner (Appeals) was contested by the Revenue before the Tribunal. While deciding the issue in ITA no.3938/Mum./2018, vide order dated 27th November 2019, the Tribunal has upheld the decision of the learned Commissioner (Appeals). Thus, on merits also, it has been held that the provisions of section 194H of the Act would not be applicable to the margin allowed to the stockiest. In view of the aforesaid, we upho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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