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TMI Blog2019 (2) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... that amount received for undertaking procurement and marketing of milk and milk products through concessionaires is a case of purchase of milk outright and not agency sales. Disallowance of salary and wages - HELD THAT:- The adhoc addition made by the Assessing Officer at 80% of the salary and wages claimed has been reduced by the CIT(A) to 20% of such salary and wages on the basis that it is excessive in nature. The CIT(A) has taken proper consideration of the nature of the assesse's business and its turnover in consonance with the ratio of salary and wages vis-a-vis turnover. Addition u/s 68 - Cash credit of Surjeet Singh - HELD THAT:- Assessing Officer noted Surjeet Singh’s confirmation. Yet, the person himself could not be produced before the Assessing Officer as the time given was short towards the end of the assessment proceedings. The Ld. AR submitted that he can be produced if so directed by the Tribunal.Therefore, we are of the opinion that it will be appropriate to remand back this issue to the file of the Assessing Officer to decide the same afresh after verifying all the details about the cash credits including presence of Shri Surjeet Singh before the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against the order dated 28/02/2014 passed by CIT(A)-VI, New Delhi for Assessment Year 2009-10. 2. The grounds of appeal are as under:- 1. (a) The Ld. CIT (A) has erred in both law and on facts in confirming addition of ₹ 2,58,00,000/- on account of the liabilities of consolidation charges outstanding as on 31.03.2009 for non compliance of provision of section 194H r.w.s. 40(a)(ia) of the IT Act. (b) On the facts and in the circumstance of case, the finding of the Ld. CIT(A) in para 5.2.5 of the impugned order that there was a agency arrangement between the consolidators and the appellant assessee and therefore the appellant was held liable to deduct TDS u/s 194H r.w.s.40(a)(ia) of IT Act. and justifying the disallowance of ₹ 2,58,00,000/- on that account. 2. The Ld. CIT(A) has erred both on facts in law in sustaining the disallowance of ₹ 43,93,291/- to the extent of 20% of the Salary and Wages of ₹ 2,19,86,456/- debited to the P L Account. 3 The authorities below have acted arbitrarily and without any reasonable in holding the credit of ₹ 48,00,000/- as par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for surrender of rights or otherwise consideration for arrangement of land from Land Owners. 'Consideration' has been defined as the overall difference between sales price and agreed price, which is payable by the first party (the assesse company) to the second party (the consolidator) irrespective of any amount of differences. It will be calculated according to the number of acre land procured. The Ld. AR made reference to the Rights and Obligations of the first party particularly clause 6 and Rights and Obligations of second party particularly clause 3. The Ld. AR further submitted that the reading of the MOU as a whole makes it clear that the consolidators were interacting independently with the Land Owners (farmers) for a profit motive and not doing any service to the assesse company by acquiring their land by means of an Agreement to sell (ATS) at a certain sales price, which they subsequently sold to the assesse company at an agreed price (the difference not exceeding a certain amount) with a guarantee of satisfaction over a period of 3 years and 6 months, so that there should not be any deficiency in the purchase of land by the Assessee company. The MOU thus makes i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Assessing Officer was right in disallowing ₹ 43,93,291/- to the extent of 20% of the salary and wages debited to the +profit and loss account. The Ld. DR relied upon the order of the CIT(A) and the assessment order of the CIT(A) and the assessment order. 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the MOU makes it clear that the contract between the consolidators and the assesse company is in the nature of 'contract of sale' with a guarantee period and not a 'contract of agency' and the difference between the agreed price and sale price for surrender of rights was an incentive /compensation /profit (whatever one may call) for offer of sale with guarantee which cannot be called a commission or a brokerage for invoking the provisions of section 194H as the contract between the consolidators and the assesse company was a contract of a principal with a principal. The principal-agent relationship which is a sine qua non for invoking provisions of section 194H is missing in this case. It was a contract of sale with a guarantee period. The Hon ble Delhi High Court in case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash creditor was being given various advances aggregating to ₹ 87.08 lacs in connection with aggregation and consolidation of the lands out of which he returned ₹ 48 lacs out of the advance of ₹ 50 lacs which he received on his agreement to sell of his lands. The Ld. AR submitted that it is not correct to say on the basis of facts on record that the assesse has not filed his confirmation with his income tax particulars. The Assessing Officer noted Surjeet Singh s confirmation. The Ld. AR submitted that however, he could not be produced before the Assessing Officer as the time given was short towards the end of the assessment proceedings. The Ld. AR submitted that he can be produced if so directed by the Tribunal. 12. The Ld. DR submitted that the credit of ₹ 48,00,000/- as part of repayment of the advance given earlier to the business associate is rightly held as unexplained cash credit as per the provisions of Section 68 of the Act by the Assessing Officer as no explanation was given by the assessee during the assessment proceedings. 13. We have heard both the parties and perused all the relevant material available on record. The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act was rightly down by the Assessing Officer. 16. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that some of the evidences were not before the Assessing Officer and Assessing Officer has also not verified the whereabouts of Shri Mange Ram. Therefore, it will be appropriate to remand back this issue this issue to the file of the Assessing Officer to decide the same afresh after verifying all the details about the said transaction. Needless to say, the assessee be given the opportunity of hearing by following principles of natural justice. Ground No. 4 is partly allowed for statistical purpose. 17. As regards to Ground No.5 relating to addition of ₹ 42,84,325/- payment to Dharm Raj, the Ld. AR submitted that the ground of appeal may kindly be amended to read ₹ 42,84,375/- instead of payment of ₹ 50,00,000/-, inadvertently/ mistakenly mentioned in the ground of appeal. The Ld. AR submitted that the Assessing Officer disallowed the payment of ₹ 42,84,325/- to one Shri Dharm Raj debited to the consolidation and other charges for want of address and IT particulars to cross verify the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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