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TMI Blog2023 (8) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... ue challenging the common order dated 05.10.2018 passed by the ITAT [Income Tax Appellate Tribunal], 'A' Bench, Bangalore. 2. ITA No. 159/2019 has been filed challenging order passed in ITA No. 1940/Bang/2018 for the assessment year 2012-13 and ITA No. 157/2019 has been filed challenging the order passed in ITA No. 1941/Bang/2019 for the assessment year 2015-16. 3. Heard Shri. E.I. Sanmathi, learned Standing Counsel for the appellant-Revenue and Shri. T. Suryanarayana, learned Senior Advocate for the respondent-Assessee. 4. Following two questions have been framed by this Court for consideration in these appeals. "1. Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in law in holding that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Assessing Officer] has held that payment made by the assessee is commission. The said finding has been reversed by the CIT(A) and confirmed by the ITAT. 7. In reply, Shri Suryanarayana submitted that assessee is a manufacturer of computers and peripherals. It supplies it's product to the distributors. Distributors sell the product at their risk to the dealers. According to him, in order to ensure that sale of product is not adversely affected by unfavourable market changes, the assessee had suggested the distributors to sell the products at the price less than the actual price mentioned in the invoices raised by the assessee. He submitted that such contingencies arise on several occasions due to festival discounts, sudden change in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly recorded that distributors are required to place the purchase order as per clause 2.1 of the agreement and assessee reserves right to accept or reject any order. 11. The inventory risk after acquiring the product is that of the distributor. Payment from the distributor to assessee has no link with the further sales made by the distributor. 12. The commission or brokerage is described in explanation to Section 194H of the Income Tax Act, 1961 and it reads as follows: "Commission or brokerage. 194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities; (ii) the expression "professional services" means services rendered by a person in the course of carrying on a legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as is notified by the Board for the purposes of section 44AA; (iii) the expression "securities" shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (iv) where any income is credited to any account, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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