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2015 (8) TMI 655 - ITAT VISHAKHAPATNAMTDS liability - application of provisions of section 194H by the assessing officer (I.T.O., T.D.S.) to payments effected by appellant to retail dealers through Del-credere Agents, as commission paid to Del-credere Agents also confirmed by CIT(A) - Held that:- the del-credere agents cannot be considered to “Payees” in these transactions as interpreted by Ld CIT(A), since they have acted only as conduits. The payment is actually made to the retail dealers. Accordingly, we are of the view that the payment made by the assessee under such scheme would constitute sales promotion expenses and it would not fall under the category of commission falling within the scope of section 194 H of the Act. In view of above, we set aside the order of the ld CIT(A) on this issue and direct the AO to delete the demand raised in respect of this issue under section 201(1) and 201(1A) of the Act in respect of all the three assessment years under consideration. - Decided of favour of assessee. Short deduction of tax on payments made under the head “Brand fee” - payment of Royalty or not - TDS u/s 194J or 194C - Held that:- Though the Ld A.R tried to contend that the entire payment could not be considered as payment of royalty, yet no material was placed to substantiate the said contentions. If the contention of the Ld A.R that the amount transferred by way of “brand fee” was actually a transfer of business profits is to be accepted, it has to be shown that the property and risk attached with the products remained with the contractee. - there is no infirmity in the action of the tax authorities in treating the payment of ‘brand fee’ as payment of royalty falling within the scope of sec. 194J of the Act. - Decided against assessee. CIT(A) has already set aside the matter relating to demand raised u/s 201(1) of the Act to the file of the AO with the direction to cancel the demand raised, if it is shown that the recipients have declared the same as their respective income. The Ld CIT(A) has also directed the AO to restrict the interest chargeable u/s 201(1A) of the Act till the date of payment of tax by the recipients. The above directions are in accordance with the provisions of the Act and also in accordance with the decision rendered by Hon’ble Supreme Court in the case of Hindustan Coca-cola beverages Ltd (2007 (8) TMI 12 - SUPREME COURT OF INDIA )
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