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TMI Blog2024 (9) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... ee). Even though the Mother Dairy has given nomenclature of Principal-to- Principal in its certificate, the nature of activity undertaken by the assessee shows the actual relationship between the Mother Dairy and assessee is that of Principal to Agent. We are of the opinion that the sales proceeds belonged to Mother Dairy and the assessee turnover was only commission from the sales of Dairy and milk products. The ld DR has not controverted the fact that in earlier years, no penalty was levied u/s 271B on this issue. As the value of gross commission received from the aforesaid business as turnover is much below than the prescribed limit of Rs. 1 Crore u/s 44AB of the Act, we hold that the provisions of section 44AB of the Act were not attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. CIT(A) NFAC has failed to appreciate the arrangement of the Mother Dairy with the Appellant as per terms conditions of the agreement, according to which the relationship between them is that of Principal Agent and, therefore, there is no requirement of tax audit. The humble appellant was also not liable to have Tax Audit in view of Circular No. 452 F.No.201/3/85-IT(A-II) dated 17/03/1986. 3. Without prejudice to above ground, the Ld. CIT(A) NFAC has failed to appreciate the Appellant an ex-serviceman who was allotted Mother dairy milk booth as commission agent under Self-employment scheme of Directorate General Resettlement (DGR). 4. The appellant craves leave to add to or modify the above grounds of appeal at or before the hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed/accrued gross commission of Rs. 4,62,000 which was duly accepted by the Assessing Officer/NFAC in regular assessment. 8. Further, the ld. counsel for the assessee drew our attention towards the salient Features of Self Employment Schemes of Directorate General Resettlement (DGR) for allotment of Mother Dairy Milk Booths to eligible ex-servicemen. As per said Scheme, in the case of Milk Booths, the ex-servicemen will get higher of the assured income of Rs 11000.00 or commission of 30-35 paisa per one litre sale of milk (revised from time to time) and 5 percent for other dairy products. The ld AR argued that the DGR itself has used word Commission which is a substantial proof of the fact that there exists Principal (Mother Dairy) to agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve perused the materials on record. We are inclined to agree with the AR that the DGR has used word Commission which shows that the relationship between the Mother Dairy is that of Principal (Mother Dairy) to agent (Assessee). Even though the Mother Dairy has given nomenclature of Principal-to- Principal in its certificate, the nature of activity undertaken by the assessee shows the actual relationship between the Mother Dairy and assessee is that of Principal to Agent. We say so because the Milk booth was allotted on the following terms: - i) All the proceeds from the sale of milk and other allied products to be deposited immediately or latest by next day in the designated SBI bank account hypothecated in favour of Mother Dairy. ii) Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and he is not interested in the profits and losses made by his constituent as is not the case with the pucca arahtia. 15. In the instant case, we are of the opinion that the assessee is similarly placed to that of the kachha arahtia, who gets remuneration which consists solely of commission and he is neither interested into nor entitled to the profit and losses made by his principal (ie., Mother Dairy in given case). 16. We also find that the co-ordinate Bench in the case of Ved Singh ITA No. 998/DEL/2023 order dated 19.01.2024 and the decision in the case of Mohammad Daud ITA No. 1691/DEL/2022 order dated 22nd May 2023 wherein under similar circumstances, have vacated the impugned penalty. In view of the above facts and circumstances and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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