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TMI Blog2015 (5) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ors are not going to be benefited by the test results and it is the patient who is going to be benefitted by the lab results. Hence, we are of the view that the traders of the goods cannot be compared with the TSPs/collectors/aggregators, as they provide only agency services as explained earlier. In our view, the assessing officer should exhaustively examine the relationship between the parties in the light of discussions made supra. The assessee is also directed to extend full co-operation to the assessing officer. In view of these facts, the Assessing Officer is directed to examine the issues afresh, collect the details from such TSPs/collectors/aggregators/assessee and if necessary examine them and decide the issue in accordance with law. We are of the view that the assessee has certainly not discharged the burden and the ld. Commissioner of Income Tax (Appeals) granted relief to the assessee ignoring the true facts and observation made in the assessment order, therefore, the impugned orders are set aside. The Assessing Officer is directed to examine the case afresh with different angles. The assessee be given opportunity of being heard, so that no grievance is caused to either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of survey, statement of Shri A. Sundararaju, Executor Director and Shri Sachin Salvi, Manager Finance was recorded on oath for which our attention was invited to page-2 onwards of the assessment order by submitting that Shri Sachin Salvi tendered differently which has been overlooked by the ld. Commissioner of Income Tax (Appeals). On the other hand, the ld. counsel for the assessee, Shri R. Murlidhar, defended the conclusion arrived at in the impugned order. During argument, the Bench raised a query to the ld. counsel for the assessee to explain the following points. 1. Nature and type of contract with (a) Thyrocare service provider and (b) Thyrocare aggregator. 2. Whether, the assessee and aforementioned contractor deducted 10% tax at source. 3. How much tax was deducted by the assessee and its clients. 4. How much income was declared by the assessee. 5. How many persons/clients/contractors deducted tax at source. 6. How much expenses were claimed by the assessee on purchase of promotional material and how much money was taken by the assessee from the clients/contractors/service providers/ aggregators. 2.1. We have considered the rival submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he samples the respective TSPs are required to do work order entry specifying therein the details of the patient, referred doctors name, tests asked for etc. The TSPs are required to affix a unique barcode on each and every sample sent to TTL for processing. This barcode is the main identity to track any particular sample. The TSPs are explained the entire procedure which they require to follow rigidly failing which the company may charge and recover from them Non-compliance penalties. As soon as the sample is received at TTL end. The same is scanned and the barcode sighting is done for each and every sample to be processed. Based on the barcode sighting the work order entry and the test proposed to be done are mapped to the identity barcode. Generally entire laboratory processing operation is done in the night shift only due to administrative and logistic constraints. Once the barcode sighting is done the samples are placed in .tray on the Laboratory Track. The track takes care of the sampling bifurcation based on the tests proposed and there is no human intervention needed or required in the entire processing operation. The tests are performed by the wholly automated machines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned herein above the B2B rates for TSPs are fixed and charged from the respective TSPs on the basis of samples processed. To control charging of high prices for tests as compared to the competitors and to safeguard the interest of the general public TTL has defined catalogue rates and the TSPs shall not charge any amount above the catalogue rates. The billing to TSP is done only as per the B2B rates and no other amount is collected or paid to TSP over or below the same. Q.11 As per para no.18 of the Affidavit} TSP is not allowed to give samples for testing to any other laboratories. It shows that the TSP is exclusive agent. Ans. TSPs are not agent of TTL they are separate entity. TSPs are restricted from forwarding samples' to any other competitor laboratory for the reason that the patients who are going to the respective TSPs for getting the Thyrocare test done on the understanding that the TSP is authorized Thyrocare Service Provider shall get reports or shall get their specimens processed from TTL only for wh.ich they have been referred to by the respective doctors. Q.12 You have provided two price lists for the tests being Thyrocare 7 Technologies Ltd conducted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tests or for rebate on additional tests performed. Q. 15 Do you have any direct tie-up with hospitals/ doctors and other corporate entities for doing the tests other than through TSPs? TTL is not having any direct tie-up with hospitals/ doctors. TTL is having arrangement with corporate entities for doing the tests wherein the corporate are billed for services provided to the sample processed. The said arrangements however are not long term and are corporate project basis only. If for example a particular corporate entity wants to test the samples of its staff or customers they may entering into contract with the TTL to avail the services. The rates in which case are mutually decided between the parties as per the terms and it varies for corporate to corporate. It needs to be noted here however that no such corporate entities can become TSP of TTL in the general public interest. Q.16 You are providing the test kits to the TSPs. Whether it is given freely or you are charging any money for the kits? Haw you account the same in your books of accounts? Ans. The material supplied to. TSPs like tube packing material etc. is charged from TSP. The company is accounting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready reference and analysis:- 4. Statements of Shri Sundararaju, Executive Director: (The director was also examined under oath on the same line as that of manager finance and hence the same are not dwelled into once again for the sake of brevity. The answers provided by the director are also in sync with that of the Manager Finance). However, certain specific facts mentioned by the Director, which was not mentioned by the Manager Finance, are reproduced hereunder: Q.9. From the trial balance for the year 01-04-2011, it is seen that as on date 21st sep, 2011, under the head showing testing ( rebate/discount) provided of ₹ 81,88,694/ has been debited . In this regard pl explain why it should be treated as discount/commission provided to the collection agent/center and also please explain why TDS has not been made on this amount? Ans. We insist for big blood testing camps by the Collection Centers and as and when such camps are conducted we charge the Collection Centers as per rate list and however, in view of big camps the rates are reduced to the patient by the Collection centers and we also reduce the billing of camp samples and give credits for the differentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... your company? Ans: The business model is based on volumes. When more no of tests are done the reagents cost will be low. We want to be different from, local pathology,, labs which operate in 5 to 10 Kms radius. The reagent cost for doing thyroid test as on date is ₹ 30-00 for us while we charge ₹ 100-00 to the Collection Center. This low cost of reagent is possible when we purchase bulk volume of reagents and the suppliers reduce the rates to us due to volumes. The local labs cannot compete in rates with us because our rates are low due to high volume and high volume of tests are possible only when we charge less. We are charging the same amount of ₹ 100-00 for. Thyroid to our collection Center for the last 15 years though initial years we are not making profits, now a days our profits have grown due to bulk buying of reagents. Q.13 In how many( generally or on average basis) cases the collection agents/center charges more than as rates are printed on the test catalogue? Do you think that overall such more charging may happen in 10 to 20% even though the collection agents/centers are independent and free to charge as per their wish, and circumstances? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviders to the assessee, therefore, the extract of their statements is also reproduced for ready reference and analysis:- 5. During the course of proceedings u/s 201, a few TSPs were examined under oath vis-a-vis their role in respect of the services provided them to TTL Extract from one of such statements is reproduced hereunder Statement of Shri Manish Gandhi Q 3 What is your educational and other professional qualification Any minimum qualification or specialization is required to become the 2 Service Provider of Thyrocare Technologies Ltd. Ans. I am B.Com and DMLT by profession For becoming a franchisee, we have to appoint B Sc DMLT staff for the smooth work. The company is giving training 2-3 times a year on a specific subject to me and my staff. Q.4. Please describe the nature of business in which you are engaged and what is the nature of services you are rendering for Thyrocare Ltd.? Ans. We are providing specialized pathological blood testing for our hospitals, nursing homes and other pathology laboratories and for patients. We also collect samples from the residence of the patients (home service). I am getting services from Thyrocare Technologies Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esting, software for computer etc? Ans. Cost of the consumables required at the collecting center, or at the residence is entirely borne by me which is supplied by Thyrocare Tech. Ltd. The company is also providing software for online system. Q. 13 How you are showing the accounting entries for the transaction with Thyrocare? Ans. There are two rates given by Thyrocare one is Catalogue rate and the other one Service provider rate. I charge the amount in between these according to the customer but cannot charge more than catalogue recommended rate. They have given a certain credit limit. Above that we have to pay as pr the bills. 6. On perusal of sample copy of standard affidavit cum undertaking executed by TSPs alongwith, their application form for appointment as TSP, it is seen that the assessee company exercises completely control over the TSPs. Some of the salient features of this undertaking /affidavit, which will a go a long way in describing the nature of relationship between the TSP and assessee company are as under: - 1) The TSP solicits its business by displaying the board/poster with logo of the company the TSP cannot use, the logo of the company without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee Company and it was required to explain as to why you should not be treated as assessee in default for non-deduction of TDS under the provisions of Section 194H of the I.T. Act on the amounts charged by the TSPs from the clients for collection of samples. 8. In response to the above the, assessee company has made a detailed submission. Some extracts of the submissions, relevant proceedings, are reproduced hereunder, for proper reading and understanding: Thyrocare Technologies Limited (TTL) is in the business of providing diagnostic services. TTL is' an accredited laboratory. Thyrocare Technologies Limited (TTL) is processing the samples received from Thyrocare Service Providers (who are assigned TSP Source Codes) and no business is sourced by any patient directly from TTL. The TSPs do not do any testing at their end and they are more involved in .the pre analytical functions of diagnostic testing. Thyrocare Service Providers (TSPs) are authorized by the Company after taking a refundable security deposit and after submission of the required documents to suffice their qualification to handle human blood samples. The method of business operation between TTL and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... splaced, heavy rains, etc., and in such cases the amount billed as per the rate contract is given back to the Collection center by way of credit as no samples received and no tests have been performed by the Company. The rebate on account of cancelled tests given to TSP ledger is nothing but similar to goods return wherein after sale of goods if the same are not fit for consumption or for any other reasons the buyer returns the goods to the sellers and the seller owes back to the buyer. The credit on account of cancelled tests, wrong billing or error in billing shall not construed to be taken as commission or brokerage as contended by you in question no. 4 for application of the provisions of section. 1 94H of the income tax act, 1961. Your goodself has contented in the said question about applicability of Section 1 94H of the Act to the rebate part which is unjustifiable on account of the reasons mentioned above. The existence of a Principal - Agent relationship is a must for the applicability of the provisions of Section 1 94H of the Act. These TSPs acts as aggregators who collects samples and avails the services of pathological laboratories like TTL with respect to tes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for which TTL is never and shall not be accountable at any event in time. . Further to this the TSPs have totally different and independent infrastructure, logistics and samples administration. They also maintain their own set of accounts independent from that of TTL as they avail services from other laboratories too. TTL is providing specialized diagnostic service to TSPs and it is not that these TSPs are pro vidi.ng any kind of services wherein the provisions of TDS ever will apply. If as alleged by your goodself the TSPs are acting as the agents of TTL, the entire receipt collected by them would have been recognized as income of 7TL, the TSPs would not have to deduct tax at source out of the payments made to TTL for services and that in such case the commission alleged as per your contention would have been debited to expenditure account however this is not true and factually this is not correct. With reference to the provisions of Section 1 94H of the Act, the facts of the case as has been demonstrated furing the survey proceedings and during the course of the submission. The TDS provisions do not apply on the rebate given it TSP ledger on account of the cancelled te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shortest possible time. ii) The average Indian consumer prefers to avail the services or procure good at affordable cost be it healthcare or any other service, good TTL over these years could create an option to these average consumers to avail the best of quality services at affordable costs. iii) The rates at which similar services are offered by the competitors are twice or thrice of the rates at which these services are offered by TTL and that is the reason that even TTL processes larger volume of tests per day, the turnover of TTL is lesser as compared to most of these competitors. TTL as a policy never offers any commission, incentive, free services, and concession to any of the doctors, clinics, medical community. Apart from the same since it has been examined by your goodself during the statement taken on oath of these respective TSPs that they are availing services not only from TTL but from other pathological laboratories, this itself beyond any doubt stresses our contention that these collection centers' are at their option free to avail services from any pathological laboratory as per their discretion and as per their business interests. They at their dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directs nor does order to any of its TSPs to charge as per the catalogue rates neither any of the provisions of any law entitle him to do the same. The catalogue rates are only meant as a prohibition in order to protest the interest of the patient from the wasted interest medical community. Therefore) the prescription of the catalogue price only is an ethical business practice followed to regulate the menace of the wasted interest against the general public and cannot or shall not be considered as a suggestive practice in order to gain an undue advantage by unethical business practices. Now since we are not seeking any information about the rates charged by these TSPs we are unable to review the correctness of their statement but even otherwise it would be incorrect to state a general statement that catalogue rates are charged. First and foremost important please note an important point which was emphasized by us during the proceedings, TTL never recommends any of the TSPs to charge as per the catalogue rate. We have with our submission earlier provided with the copies of the bills raised by the TSPs which we could able to manage to receive on request from them whereof these TSP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically undertake directly or indirectly not to use the name, logos, brand names of the accrediting agencies such as ISO, CRISIL, NABL, CAP, Thyrocare, Aarogyam, etc. at any point of time in any letter heads, report forms, advertisement, hand bills, visiting cards, receipts and or any other stationary and I am agreeable for any punishment/ penalty imposed by the company on me for violation of this clause. On review of these clauses it can be clearly marked that these TSPs have affirmed not to use logos or names of the company and failing of which they may face criminal liability as well as civil liability.. This has been clearly made known to them and they have affirmed for the same. The non compliance of the affirmation on the part of these TSPs shall not construed to mean that they are allowed to do which is punishable under law. Even otherwise the TSPs are not allowed to use the name of the company for any reporting, any collection from their customers. We can able to submit documents wherein we have actually penalized such errant TSPs for non compliance when it was brought to our notice by the complainant. Now further it needs to be emphasized that clear mention about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,to the charges they have collected from the patients and the same is not relevant or material to TTL. TTL cannot ascertain what type of tests and how many tests will be ordered by the TSPs on a daily basis. The number of tests and type of tests are decided by the TSPs on the basis of their requirements from their customers and patients and they order for their requirements on day to day basis. They have been allotted a credit limit as happens in case of any debtor/creditor relationship. The TSPs who have exceeded their credit limit cannot get their reports from TTL till the clearance of their dues. For the advantage of the TSPS to know what type of tests are provided by TTL and at what rates the TSP will be billed, what technology is used in doing the tests, what are the normal ranges for each and every test performed and what are all the information and data to be provided by TSPs to TTL for getting the tests done and the same is facilitated by the Software provided by TTL. The ledger account shows the amount billed to them, the debit notes raised for the cancelled tests, the amount received from them against the billing and the closing balance due to them. This ledger infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olume. There is no differentiation in the TSPs as per their grade or else based on the turnover or based on any of the other criteria. The B2B rates are unique and same to each and every TSPs so there does not exists any question of awarding or honoring of any of these TSPs. Based on the billing done annually do these TSPs internally for understanding of the management MIS are generated to understand the TSP wise billing but for the reason that one TTL has received revenue from one TSP more than someone other no TSP is differentiated or honored in B2B rates. i. The TSPs availing the services of TTL sends the specimen of that beneficiary to TTL for testing it. The TSP issues its own bill/invoice to the patient/customer (the copy whereof for some of them were already provided to justify the contention). The TSP collects the charges for the test and issues receipts for the amounts collected. The TSP thus then send their samples to pathological laboratories like that of TTL with respect to testing of samples and issuance of necessary reports. In case the tests are done by TTL, it raises periodical invoices on the TSPs and for which in turn the TSP generally makes payment to TTL afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent rates to the same test to two different patients, some TSPs are charging different rates to the same test to patients and laboratories, clinics, some TSPs are charging different rates to the same test to two different clinics/ laboratory, some TSPs are providing free of cost, some TSPs may be charging as per catalogue rates as per your contention. Some TSP are charging rates of that of the competitors. These rates are thus decided by the collection center at their individual level and as per their discretion. TTL cannot exercise any control on the same. d. The usage of logo or name of the company to the collection centers is strictly prohibited as per the affidavits given by the collection centers to TTL failing of which they may face criminal and/or civil liability inspite of this if any of these collection centers are misusing the rights the collection centers are penalized for' the same whenever the same is brought to the notice of TTL. The collection centers are obliged to send the samples of the patients who specifically asks for Thyrocare report and for which they are authorized to operate beyond this they do .not have any right to represent themselves on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecialized tests. ii. The affidavit obtained from the TSPs for authorization does not mention any principal agent kind of relationship in fact the same clearly mentions that the TSPs shall not consider themselves as an agent. Therefore clear mention of the terms and affirmation by the TSPs of the terms itself proves that the authorization given to TSPs is restricted only with respect to the samples which are processed at TTL and nothing beyond that they are not supposed to voluntarily or otherwise shall consider themselves as agents of the company. iii. The affidavit or other authorization does not mention any thing about the commission, incentives etc., The B2B rates are clearly defined by the agreement and further to that there is no differentiation in these rates also. They are identical to each and every TSP no matter to which region he belongs. How much workload he achieves, how much years of association he has. The understanding is simple. TTL will charge for the services provided and TSPs shall pay for any amount charges. Nothing is implied and nothing shall be misinterpreted further to this simple understanding. Therefore in response to your question we may conclude i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of TTL may have similar authorization from their concerns and summons proceedings to the TSPs you goodwill had also come across records wherein they have agreed that they are availing the services of other pathological laboratories also. The TSPs are not obliged to always forward the samples only to TTL and it is upto the complete discretion of these TSPs and their individual business interest that the decision is resorted to these TSPs. These TSPs also have the option to conduct the tests themselves or to outsource their medical services to other laboratories had they have the requisite expertise and infrastructure .lt needs to be noted that some of these TSPs are actually performing the routine tests at their locations on the sample collected by them. If a beneficiary insists with TTL and/or unfavorable experience with any of the other pathological laboratory as a matter of ethical business practice it is anticipated that these samples shall be forwarded to TTL Only. The TSPs forward the samples to TTL as stated above. The TSPs also submits online work order entry for requisition of the test. The online entry page mandates them to submit the history of the patient also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey must be charging always 100% more than what they are charges even otherwise. The facts clearly leads to a conclusion that the rates charges by the TSPs from its: customers are solely at the discretion of these TSPs. As mentioned earlier these TSPs are operating from within different localities and having their own clinics., dispensaries, hospitals etc., providing healthcare services to their patients and availing specialized diagnostic services from various pathological like that of TTL. These collection centers have their own set ups own office, clinic logistic infrastructure totally different Apart from our explanation above we have previously in detailed elaborated our stand as to why the nexus or relationship as principal and agent shall not be established between TTL and the TSPs. There are two separate legal relationships. It is not justifiable or correct in law in mixing up the two distinct relationships or merging one into the other to hold that because the TSPs do provide Thyrocare services., they are carrying on the business as agent of TTL. Thus the detailed business activities undertaken by the company, the billing, the rates, the rebates on account of canc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred and gets vested in the concessionaire at the time of the delivery, then he is thereafter liable for the same and would be dealing with them in his own right as a principal and not as an agent of the Dairy. The Clauses of the agreements show that there is an actual sale, and not mere delivery of the milk and the other products to the concessionaire, The concessionaire purchases the milk from the dairy. The Dairy raises a bill on the concessionaire and the amount is paid for. The Dairy merely fixed the MRP at which the' concessionaire can sell the milk. Under the agreement the concessionaire cannot return the milk under any circumstance, which is another clause indication that the relationship was that of principal to principal. Even if the milk gets spoiled for any reason after delivery is taken, that is to the account of the concessionaire and the Dairy is not responsible for the same. These clause have all been noticed by the Tribunal. The fact that the booth and the equipment installed therein were owned by the Dairy is of no relevance in deciding the nature of relationship between the assessee and the concessionaire .: Further, the fact that the dairy can inspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r products are concerned, these items became their property the moment they took delivery of them and they were selling the milk and the other products in their own right as owners. These are two separate legal relationships. The income tax authorities were not justified or correct in law in mixing up the two distinct relationships or telescoping one into the other to hold that because the concessionaires were selling the milk and other products from the booths owned by the Dairy and were using the assessee s equipment and furniture in the course of the sale of the milk and other products, they were carrying on the business only as agents Of the Dairy (para 13) Therefore no substantial question of law arises from the order of the Tribunal. The appeals of the revenue are accordingly dismissed (para 15) Now in the case adjudged by the Honorable High Court, even though the concessionaires appointed by the dairy are operating from the premises owned by the dairy and using the infrastructure also of that of the dairy, it shall not construed to mean that there exists a principal agent kind of relationship between them. In case before your goodself the collection centers premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no obligation to always forward these samples to the assessee. It is only in case the patient/customer insists that the laboratory testing be done by the assessee, that the collection Center, forwards the sample of such a patient to the assessee, for testing. The collection Center also fills up the necessary test requisition forms to be sent alongwith the sample.The assessee conducts the test /tests and issues the report with regard thereto, to the collection center. The collection center issues its own bill/invoice to the patient/customer. The fees for the testing is collected by the collection center and the receipt is also issued by the collection center. The assessee raises its periodical invoices on the collection centers. The collection Center makes the, payment to the assessee after TDS under section 194J. Under the Agreement , the services are rendered by the assessee in the form of laboratory testing at a discounted price from the price given in the standard price list. This discount has been considered by the authorities below as commissions and they have held that tax was required to be deducted thereon under section 194H (para 10.) Now, it has not been shown that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee by the collection centers. It has not been shown to be so. Moreover the amount retained by the Collection centers was not regarded as the income of the assessee and the commission allegedly paid by the assessee to the collection centers was $ not treated as the deductible expenditure (para 13] . The assessee s contention that the collection centers have the option to conduct the tests, themselves or to out-source their medical services to other laboratories, has been simply brushed aside by the Commissioner (Appeals) stating it to be of no significance. This, however, is not correct. Firstly, this contention has not been disproved. It is borne out from the agreements. Then, if this averment on be half of the assessee is correct, the element of agency in the relationship between the assessee and the collection centers goes away. True, the collection centers have to follow the terms of the contract entered into by them with the assessee. However, no violation of the terms of these agreements has been shown. The Commissioner (Appeals) has concluded that the assessee s contention that the centers can out-source their services to other laboratories, is factually incorr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the Commissioner (Appeals) has not taken those into consideration. In fact, no reference whatsoever has been made to this documentary evidence. Therefore, the contention of the assessee regarding the Collection Center free to charge the rates as desired by them from the customers/patients does not stand rebutted and the Commissioner (Appeals) has wrongly based his finding in this regard merely on the advertisement are, no doubt, the specified rates, but the assessee has been able to show that the Collection Centers do charge rates over and above such specified rates, as desired by them. The observation of the Id. Commissioner (Appeals) against the assessee in this regard is, therefore, not correct [para 19]. The Commissioner (Appeals) has also observed that the assessee is bound to the Collection Centers in terms of the report issued in respect of samples referred by the Centers to the assessee and tested by the assessee. No Principal Agent relationship stands established by this sole fact, obviously, since the assessee renders professional services, and that too, professional conduct which has to be abided by the assessee. The assessee is under a strict obligation. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the professional services rendered. The collection center has the flexibility and freedom to choose the laboratory to which samples have to be sent for testing., unless the same is mandated by the patient/customer. Moreover, the collection center charges the customer rates fixed by the collection center ,(and not decided by the assessee) though at the same time, keeping in mind the amount that would have to be paid by the collection center to the assessee or to any other laboratory to which the samples have to be sent for testing. In fact, in certain cases, the collection centers have, $ as also brought on record, charges over and above the standard price list provided by the assessee to all collection centers, which averment has gone unrebutted. [para 39]. In view of the above, it is to be held that (1) there is no Principal Agent relationship between the assessee and the collection centers and that being so, the provision of section 194H have been wrongly invoked;(ii) the provisions of section 194H could, even otherwise, not have been met, since no payment has been shown to have been made by the assessee to the collection centers; (iii) The payment made to the assessee by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 48 months 36 months for A.Y. 2009-10 2010-11 respectively, are tabulated here below: Amt. In Rs. S.No. A.Y. Commission Default Interest Total 1. 2009-10 ₹ 43,09,62,682 4,43,89,156 2,13,06,795 6,56,95,951 2. 2010-11 Rs.53,34,20,166 5,49,42,277 1,97,79,220 7,47,21,497 12. The assessee has not discharged its burden, as casted upon by the Hon. Apex Court, in the case of M/s Hindustan Coca Cola, the benefit of the same cannot be granted to the assessee at this point of time. The assessee is directed to pay the above demands. Separate demand notices are enclosed for both assessment years. 2.4. The broad principal establishes that the TSPs are indeed the agents of the assessee in so far as collection of samples and delivery of report is concerned, for ready reference, our view is fortified by the following points which are also mentioned in the assessment order :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SPs/collectors/aggregators is so arranged to give it colour distinguishable from commission or brokerage as envisaged in section 194H of the Act. 2.6. During the course of hearing, the Ld A.R vehemently contended that the relationship between the assessee and TSPs/collectors/aggregators are that of Principal to Principal basis, yet no document was produced before us to substantiate those contentions. Further, we notice that the test results given by the assessee directly benefit the patients and in that case the TSPs/collectors/aggregators appear to act as mere agents of the assessee in collecting the samples from the patients and giving the results to them. When this factual matrix was put before the ld A.R, he tried to convince the Bench that these activities are akin to the traders of goods, wherein the traders are also supplying the goods to the ultimate consumers. However, we are not convinced with the said arguments of Ld A.R. In trading of goods, the title to the goods passes from the manufacturer to the wholesaler and from the wholesaler to the retailer and then from the retailer to the ultimate consumers, i.e., each of the parties mentioned above become owners of the go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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