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TMI Blog2013 (7) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... drinks under the brand name i.e. Pepsi, Miranda, 7up, Evervess Soda etc. The company has been manufacturing Pepsi at its manufacturing unit at Jammu in various sizes. A survey u/s 133A was carried out at the business premises of the company at 52, Janpath, New Delhi on 17.11.2003. During the course of survey, it was noticed that the appellant company has appointed many distributors / dealers for distribution and sale of its products. The AO took the view that the payment has been made to the distributor representing difference in MRP of the product and the invoice raised on distributor and therefore constitutes commission u/s. 194H of the Act and the company has deliberately chosen the nomenclature of discount to conceal the true nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as its own vehicles and staff to distribute the same and from the point of view of the distributor / C & F agent, he is clearly providing service to the assessee by facilitating the supply of assessee's products in his marked area and also collecting the empty bottles from consumer and sending back to company it proves that the nature of transaction between the assessee and the distributor is that of principal-agent but not principal to principal and further in my opinion the relationship between the assessee and the distributor agent is more in the nature of Del Credere agent and the transactions falls within the purview of section 194-H and treated the assessee in default u/s 201/201(1A) for the financial year 2003-03 and 2003-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been adjudicated upon by Jurisdictional High Court, in favour of the assessee. In fact a reading of the order of the AO demonstration that the issue is no more res integra. 7. We have examined the facts and circumstances of the case, order of the AO as well as the order of the Tribunal and the Hon'ble Delhi High Court in the case of M/s Jain Drinks Pvt. Ltd. The facts of the case are identical to the facts in the case of M/s Jai Drinks Pvt. Ltd. 8. The Hon'ble Delhi High Court in ITA No. 399/2010 judgment dated 6th January 2004 in the case of CIT Vs. Jai Drinks Pvt. Ltd. confirmed the order of the Tribunal and at Para 8 & 9 observed as follows: "8. A perusal of the agreement shows that the assessee had permitted the distributor t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to be purchased by the distributor against 100% advance payment or may be some times on credit at the discretion of the assessee. Both the assessee and the distributor have been collecting and paying their sales tax separately. Both the parties have clearly understood and accepted the agreement between them. That being the arrangement between the assessee and the distributor, it could not be said that the relation between them was that of principal-agent. On the other hand it was clearly stipulated to be an arrangement between them on principal-to-principal basis. Both the CIT (A) and also the ITAT rightly held that the payments being made by the assessee to the distributor were incentives and discounts and not commissions. We find no i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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