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TMI Blog2015 (1) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore, whatever be the margin made available to the stockist, so long as the assessee is not making any payment to the stockist, the question of invoking Section 194J against the assessee does not arise. Once it is held that in the present case, Section 194J is not attracted, then, the question as to whether there was relationship of principal to principal or relationship of the manager becomes academic. - Decided in favour of assessee. - ITA (L) NO.1427 OF 2012, ITA (L) NO.1428 OF 2012, ITA NO.1545 OF 2012,ITA NO.1622 OF 2012 AND ITA NO.15 OF 2013 - - - Dated:- 16-1-2013 - J.P. Devadhar M.S. Sanklecha, JJ. Mr. A.R. Malhotra for the appellant Mr. J.D. Mistri, Senior Advocate with Mr.Niraj Seth and Mr.Atul K Jasani f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... method adopted by the assessee as follows : Where the M.R.P. of a drug is ₹ 100/, the respondent - assessee sells its goods to M/s.Zivon at 70% of the M.R.P., in turn M/s.Zivon distributes / sells the same amongst the retailers at 80% of the M.R.P. and the retailer in turn sells the drugs to the ultimate purchaser at the M.R.P. 3. Consequent to the survey, the Revenue issued notices to the respondent - assessee seeking to know why M/s.Zivon, the superstockists should not be treated as a Manager for the purposes of tax deduction at source by the respondent assessee. The assessing officer by five identical orders dated 25th February 2011 (separate for each assessment year) on consideration of the agreement between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - assessee to M/s.Zivon. Thus, the occasion to deduct tax under Section 194J of the Act would not arise as the condition precedent for its application would be that a person covered must be responsible for paying a particular sum of amount by way of professional or technical fees etc. Further, the Tribunal records the fact that the Revenue does not dispute the fact that the respondent - assessee has received 70% of the M.R.P. from the superstockist as consideration for the purposes of handing over / selling its drugs to M/s.Zivon for further distribution. In view of the above, the Tribunal held that there would be no question of deduction of tax by the respondent assessee on receiving 70% of the M.R.P. from M/s.Zivon. 6. Mr.Malhotra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of Commissioner of Income Tax V/s. Qutar Airways reported in 332 ITR 253 and of the Kerala High Court in the matter of M.S. Hameed Vs. Director of Lotteries reported in 249 ITR 186. 8. The submission on behalf of the Revenue that this a mere device to evade the obligation to deduct tax at source is a mere conjecture as it is not supported by any evidence and/or facts on record. Once it is accepted / admitted position that there is sale of drugs by the respondent to M/s.Zivon and no amount is paid by the respondent to M/s.Zivon, there can be no occasion to apply Section 194J of the Act. There has admittedly been no credit of any sum to the account of M/s.Zivon in its books of accounts nor any payment made by the respondent either i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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