9911796707
TMI Blog2012 (2) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee are to act as selling agents, sale organizers and advisors and to undertake activities in connection with procurement, processing, storage and marketing including retail, sale of milk and other products. On 9.12.2004 there was a survey under Section 133A of the Act in the business premises of Ms/ Mother Dairy Food Processing Ltd., which is the other assessee in the appeals before us, at Parparganj, Delhi. In the course of the survey it was found that tax was not being deducted at source on the payment of commission to agents/concessionaires, who sold milk and other products of the assessee from the booths owned by the assessee. According to the revenue, the assessee ought to have deducted tax under Section 194H of the Act from the payments made to the concessionaires, on the footing that the payment represented commission within the meaning of Explanation (i) below the Section. According to the Explanation commission includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the case of buying or selling of goods or in relation to any transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Dairy. This Clause also provided that the possession and control of the shop was with the assessee and the looks were also to be provided by the assessee only. The concessionaire will only be given the duplicate keys. According to Clause 17, the concessionaire was required to record the quantity of unsold milk in the prescribed register within 15 minutes of the close of the scheduled vending timings or before the supply of milk is taken by the concessionaire from the Dairy, whichever is earlier. It was not open to the concessionaire to make additions or alterations to the balance, quantity and milk recorded by the concessionaire except with the prior permission to the Dairy. Such permission, if required and given, has to be recorded in the register. 6. After taking into consideration the assessee's submissions and the above clauses in the agreement, the Assessing Officer came to the conclusion that the relationship that existed between the assessee and the concessionaires was not that of principal-to-principal, but it was a relationship of a principal and an agent, the assessee being the principal and the concessionaire being the agent. In coming to this conclusion, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of the tokens. The concessionaires had to pay the consideration to the assessee as per the delivery invoices at the time of delivery of the milk. Any unsold quantity of milk is to be recorded within 15 minutes of the close the scheduled vending time or before the supply of the milk is taken by the concessionaires from the assessee, whichever is earlier. The Tribunal, further noted that under the agreement the assessee will not take back any portion of the unsold milk in any condition whatsoever. From these terms of the agreement the Tribunal held that there was an actual sale of the milk by the assessee to the concessionaires on delivery. These terms in the agreement, according to the Tribunal, militated against the contention of the Revenue that the relationship was that of principal and agent. The other conditions imposed on the concessionaires by the assessee such as the right to inspect the booths at any time, right to check the registers etc. and also whether the equipment, furniture, machinery etc. were properly used by the concessionaires did not affect in any manner the relationship of principal to principal between the assessee and the concessionaires. Such ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the agreements found during the survey, was recorded. The tribunal in the present case, after noticing the earlier order of the tribunal held that in the present case there was no redrafting of the agreements and the agreements placed before it were the same as were found in the course of the survey and the terms of the agreement entered into in 1993 and in 2003 were identical and therefore, the judgment of this Court in the case of DMS (supra) upholding the order of the tribunal dated 20th January, 2006 would have no application to the assessee's case inasmuch as facts as the agreement are different in crucial aspects. Thus, the judgment of this Court in the case of DMS (supra) was held not applicable to the present case. 11. In respect of the financial year 2004-05, relevant for the assessment year 2005-06, the tribunal took the same view in its order dated 19.4.2010 in ITA No.4926(Del.) of 2009. There is no independent reasoning given in its order and it follows the view already taken by the tribunal in respect of the assessment year 2004-05 (FY 2003-04). 12. The Revenue challenges the aforesaid orders of the Tribunal relying upon Section 194H of the Act. It is not in dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naire. Further, the fact that the Dairy can inspect the booths and check the records maintained by the concessionaire is also not decisive. As rightly pointed out by the tribunal the Dairy having given space, machinery and equipment to the concessionaire would naturally like to incorporate clauses in the agreement to ensure that its property is properly maintained by the concessionaire, particularly because milk and the other products are consumed in large quantities by the general public and any defect in the storage facilities which remains unattended can cause serious health hazards. These are only terms included in the agreement to ensure that the system operates safely and smoothly. From the mere existence of these clauses it cannot be said that the relationship between the assessee and the concessionaire is that of a principal and an agent. That question must be decided, as has been rightly decided by the Tribunal, on the basis of the fact as to when and at what point of time the property in the goods passed to the concessionaire. In the cases before us, the concessionaire becomes the owner of the milk and the products on taking delivery of the same from the Dairy. He thus pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssionaires. The agreement also provided that the daily cash collection of the concessionaires was to be handed over to DMS. On these facts, it was held by the Tribunal that the concessionaires only rendered a service to DMS for selling milk to the customers and, therefore, the relationship between DMS and the concessionaires was that of a principal and an agent. This attracted the provisions of Section 194H. This is apart from the fact, as noticed earlier, that the DMS redrafted the agreements and filed them before the CIT(A) and the Tribunal and such redrafted agreements were found to be different from the agreements found during the survey under Section 133A. This Court, on the above facts held that Section 194H was attracted. As already pointed out, the terms of the agreement entered into between the present assessees and their concessionaires are different in crucial aspects. Therefore, the judgment of this Court in the case of DMS (Supra) is not applicable to the present cases. 15. We are, therefore, of the view that no substantial question of law arises from the order of the Tribunal. The appeals of the revenue in ITA No. 1925 and 313/2011 are accordingly dismissed with no o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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