ACIT, TDS, Chandigarh V. M/s Punjab State Civil Supply Corpn. Ltd., Sangrur

ITA 1450/CHANDI/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3778 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 194C; 201(1); 13

Judgement Text

आयकर य कर , य य “B”, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’, CHANDIGARH BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 1450/Chd/2019 (Assessment Year: 2012-13) Assistant Commissioner of Income-tax, (TDS) Chandigarh. बनाम Punjab State Civil Supply Corporation Ltd., District Office, Patiala Gate, Sangrur. थायी लेखा सं./PAN/TAN NO: PTLP10082C नधा रती क ओर से/Assessee by : Shri Vibhor Garg, CA राज व क ओर से/ Revenue by : Shri Sarabjeet Singh, CIT DR स ु नवाई क तार ख/Date of Hearing: 21.04.2022 उदघोषणा क तार ख/Date of Pronouncement: 26 .04.2022 आदेश/ORDER Per Vikram Singh Yadav, Accountant Member: This is an appeal filed by the revenue against the order of Learned Commissioner of Income Tax (Appeals), Patiala [in short the ‘Ld. CIT(A)’] passed u/s 250(6) of the Income Tax Act, 1961 (in short ‘the Act’) dated 07.08.2019 wherein the grounds of appeal reads as under :- 2 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. (i) Whether on the facts and circumstances of the case, the ld. CIT (A) has erred in law in not upholding the order u/s 201(1)/201(1A) of the Income-Tax Act, 1961 ignoring the fact that the assessee deductor applied provisions of Section 194C on the cash part of the payments but not on the payments which were made in kind. (ii) Whether on the facts and circumstances of the assessee, the ld. CIT (A) has erred in law in relying upon the decision of Hon’ble ITAT, New Delhi in the case of M/s. Ahaar Consumer Products Pvt. Ltd., which is on different facts. The case of M/s. Ahaar Consumer Products Pvt. Ltd. did not involve any payments of consideration for the services rendered whereas in the present case execution of work is against a consideration which includes the ash and material in lieu of payments and the TDS has been deducted by the assessee on the cash part. (iii) Whether on the facts and circumstances of the case, the ld. CIT (A) has erred in law by ignoring the fact that the provisions of section 194C are applicable on payment of any sum which should include both cash and cash equivalent. (iv) Whether on the facts and circumstances of the case, the ld. CIT (A) has erred in law while wrongly relying on the decision of Hon’ble ITAT, Division Bench ‘A’, Chandigarh in ITA No Nos. 1309, 1310/CHD, ITA No. 1312 & 1313/CHD/2016, ITA No. 1314/CHD/2016 dated 30.10.2018 in which judgment of Hon’ble Supreme Court in the case of M/s. Kanchanganga Sea Foods Ltd. vs. Commissioner of Income Tax was incorrect appreciated. (v) Whether on the fact and circumstances of the case, the ld. CIT (A) has erred in law while wrongly relying on the decision of Hon’ble ITAT, Division Bench ‘A’, Chandigarh in ITA Nos. 1309, 1310/CHD, ITA No. 1312 & 1313/CHD/2016, ITA No. 1314/CHD/2016 dated 30.10.2018 in which wrong 3 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. facts have been recorded under Para No. 13 of the judgment that “issue has been decided by the various Benches of the Tribunal in favour of the assessee and the Department has not challenged the same in High Court and in view of this, the findings arrived at in those cases have become final against the Department and thus the issue is squarely covered in favour of the assessee”, whereas, admittedly, this office of the department has already filed about 20 such appeals on the same issue. (vi) Whether on the facts and circumstances of the case, the ld. CIT (A) has erred in law in cancelling the order u/s 201(1)/201(1A) of the I.T. Act, 1961 ignoring the fact that the by-products has a substantial monetary value and the sale value of by-products is income of the deductee. (vii) The appellant craves leave to amend, add, alter or delete any of the aforesaid grounds till the disposal. 2. Briefly the facts of the case are that the appellant is procurement agency of government which is meant for procurement of food grains. Apart from other activities it is engaged in procurement of paddy, its handling & storage, subsequent Milling & holding rice and then forwarding it to its destinations on behalf of Central Government/Agencies mainly FCI as per the government policy & decisions. As per policy of the government appellant is procuring paddy from the farmers and giving the same to the rice millers for the purpose of milling. During the year under consideration, the Assessing Officer noted that the appellant deductor has allotted paddy for milling to various millers. The 4 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. milling charges are being paid @ Rs. 15/- per Quintal. As per the policy laid down by the govt., the procurement Agency i.e. the appellant received only fair average quality of rice @ 67% of the total quantity of paddy issued to the rice millers. Further, the appellant had deducted TDS u/s 194C on the amount of Rs. 15/- pr quintal given to the millers on account of milling charges, on the basis of agreement entered into between it and the miller, as per the Govt. Policy. The Assessing Officer further noted that as per agreement between procurement agency and the miller, by-products to the tune of 33% of the paddy milled are being retained by the miller free of cost, whereon no TDS has been deducted by the appellant deductor. Detailed submission of the appellant is reproduced in the assessment order. The A.O., however, did not accept the submission of the appellant and held that milling costs paid by the appellant are discounted costs and need to be increased by the cost of by-products (as determined by the A.O.) for the purpose of deduction of tax at source. Thereafter, by holding the appellant as an assessee in default u/s 194C raised demands of tax for short deduction of Rs. 7,82,41,702/- and interest of Rs. 1,87,78,008/- thereon u/s 201(1) and 201(1A) respectively. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT (A). The ld. CIT (A) following the decision of Coordinate 5 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. Amritsar Bench in case of Punjab State Civil Supplies Corporation Ltd. in ITA No. 158/Asr/2016 dated 04.08.2016 and decision of Coordinate Chandigarh Benches in case of Punjab State Warehousing Corporation Ltd. in ITA Nos. 1309 & 1310/Chd/2016 dated 30.10.2018 has decided the appeal in favour of the assessee. 3. During the course of hearing both the parties fairly submitted that the matter is squarely covered in favour of the assessee and against the revenue by the consolidated order passed by the Chandigarh Benches of the Tribunal in ITA Nos. 1309 & 1310/Chd/2016 & others dated 30.10.2018 which includes the case of the assessee and the relevant findings are contained at para 15 to 24 of the order as under :- “1 5 . W e h a v e c o n s i d e r e d t h e r i v a l c o n t e n t i o n s , g o n e t h r o u gh t h e r e c o r d a n d t h e c a s e l a w s r e f e r r e d t o a b o v e . T h e m a i n c o n t en t i o n o f t h e D e p a r t m e n t i s t h a t b y- p r o d u c t r e t a i n e d b y t h e m i l l e r s h a v e c o n s i d e r a b l e m a r k e t v a l u e a n d f u r t h e r t h a t a s u m o f R s . 1 5 / - p a id a s ‘ m i l l i n g c h a r g e s ’ i s a n o m i n a l c o s t w h i c h i s i n s u f f i c i e n t t o m e e t e v en t h e a c t u a l c o s t o f s e r v i c e s r e n d e r e d b y t h e m i l l e r s i n c l u d i n g m i l l i n g a n d d r yi n g o f t h e p a d d y, ‘ k a t a i ’ o f t h e p a d d y b e f o r e d e - h u s k i n g , d e - hu s k i n g o f t h e p a d d y, f i l l i n g u p b a g s o f t h e r i c e , t r a n s p o r t a t i o n , w e i g h t c h e c k e t c . , a p a r t f r o m t h e m i l l i n g o f t h e p a d d y. T h a t t h e r e a l c o n s i d e r a t io n l i e s i n t h e v a l u e o f t h e b y- p r o d u c t r e t a i n e d b y t h e m i l l e r , t h e r e f o r e , th e a s s e s s e e s i . e . P r o c u r e m e n t A g e n c i e s w e r e r e q u i r e d t o d e d u c t ‘ T D S ’ o n t h e v a l u e o f t h e b y- p r o d u c t s p a i d ‘ i n k i n d ’ a s c o n s i d e r a t i o n f o r t h e m i l l i n g c h a r g e s . 6 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. 1 6 . O n t h e o t h e r h a n d , t h e s t a n d o f t h e a s s e s s e e s be f o r e u s i s t h a t t h e b y- p r o d u c t d i d n o t c o n s t i t u t e a s a p a ym e n t o f c o n s id e r a t i o n f o r t h e w o r k c o n t r a c t o f m i l l i n g o f t h e p a d d y. T h a t t h e a s s e s s e es h a v e n o t d e b i t e d e v e n t h e v a l u e o f t h e b y- p r o d u c t a s t h e i r e x p e n d i t u r e i n t h e i r b o o k s o f a c c o u n t a n d h a v e n o t c l a i m e d a n y d e d u c t i o n i n r e s p e c t t h e r eo f . F u r t h e r , t h a t e v e n t h e p r o v i s i o n s o f s e c t i o n 1 9 4 C o f t h e A c t w e r e a p pl i c a b l e i n r e s p e c t o f t h e m o n e t a r y p a ym e n t a n d n o t f o r p a ym e n t ‘ i n k i n d ’ . T h a t , e v e n o t h e r w i s e , t h e i s s u e h a s n o w b e e n s q u a r e l y c o v e r e d b y t h e v a r i o u s d e c i s i o n s , n o t o n l y o f t h e C h a n d i g a r h B e n c h o f t h e T r i b u n a l , b u t o t h e r B e n c h e s a l s o , a n d m a i n l y b y t h e d e c i s i o n o f t h e H o n'b l e D e l h i B e n c h o f T r i b u n a l i n t h e c a s e o f ‘ M / s A a h a r C o n s u m e r P r o d u c ts P v t . Lt d . ’ ( s u p r a ) . T h a t i n t h e a b s e n c e o f a n y c o n t r a r y d e c i s i o n o f h i gh e r a u t h o r i t y d i r e c t l y o n t h e i s s u e , t h e s a i d d e c i s i o n s s h o u l d b e f o l l o w ed b y t h i s B e n c h . 1 7 . T o p r o p e r l y a p p r e c i a t e t h e f a c t s a n d t h e i s s u e u n d e r c o n s i d e r a t i o n , w e d e e m i t f i t t o r e p r o d u c e h e r e t h e p r o v i s i o n s o f s e c t i o n 1 9 4 C o f t h e A c t . “ P a y m e n t s t o c o n t r a c t o r s . 1 9 4 C . ( 1 ) A n y p e r s o n r e s p o n s i b l e f o r p a y i n g a n y s u m t o an y r e s i d e n t (h e r e a f t e r i n t h i s s e c t i o n r e f e r r e d t o a s t h e c o n t r a c t o r ) f o r c a r r y i n g o u t a n y w o r k ( i n c l u d i n g s u p p l y o f l a b o u r fo r c a r r y i n g o u t a n y w o r k ) i n p u r s u a n c e o f a c o n t r a c t b e t w e e n t h e c on t r a c t o r a n d a s p e c i f i e d p e r s o n s h a l l , a t t h e t i m e o f c r e d i t o f s uc h s u m t o t h e a c c o u n t o f t h e c o n t r a c t o r o r a t t h e t i m e o f p a y m e n t t h e r e o f i n c a s h o r b y i s s u e o f a c h e q u e o r d r a f t o r b y a n y o t h e r m od e , w h i c h e v e r i s e a r l i e r , d e d u c t a n a m o u n t e q u a l t o — ( i ) o n e p e r c e n t w h e r e t h e p a y m e n t i s b e i n g m a d e or c r e d i t i s b e i n g g i v e n t o a n i n d i v i d u a l o r a H i n d u u n d i v i d e d fa m i l y ; ( i i ) t w o p e r c e n t w h e r e t h e p a y m e n t i s b e i n g m a d e o r c r e d i t i s b e i n g g i v e n t o a p e r s o n o t h e r t h a n a n i n d i v i d u a l o r a H i n d u u n d i v i d e d f a m i l y , o f s u c h s u m a s i n c o m e - t a x o n i n c om e c o m p r i s e d t h e r e i n . ( 2 ) Wh e r e a n y s u m r e f e r r e d t o i n s u b - s e c t i o n ( 1 ) i s c r e d i t e d t o a n y a c c o u n t , w h e t h e r c a l l e d " S u s p e n s e a c c o u n t " o r b y a ny o t h e r n a m e , i n t h e b o o k s o f a c c o u n t o f t h e p e r s o n l i a b l e t o p a y s u c h i n c o m e , s u c h c r e d i t i n g s h a l l b e d e e m e d t o b e c r e d i t o f s u c h i n c o m e t o t h e 7 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. a c c o u n t o f t h e p a y e e a n d t h e p r o v i s i o n s o f t h i s s e ct i o n s h a l l a p p l y a c c o r d i n g l y . ( 3 ) Wh e r e a n y s u m i s p a i d o r c r e d i t e d f o r c a r r y i n g o u t a n y w o r k m e n t i o n e d i n s u b - c l a u s e ( e ) o f c l a u s e ( i v ) o f t h e Ex p l a n a t i o n , t a x s h a l l b e d e d u c t e d a t s o u r c e — ( i ) o n t h e i n v o i c e v a l u e e x c l u d i n g t h e v a l u e o f m at e r i a l , i f s u c h v a l u e i s m e n t i o n e d s e p a r a t e l y i n t h e i n v o i c e ; o r ( i i ) o n t h e w h o l e o f t h e i n v o i c e v a l u e , i f t h e v a lu e o f m a t e r i a l i s n o t m e n t i o n e d s e p a r a t e l y i n t h e i n v o i c e . ( 4 ) N o i n d i v i d u a l o r H i n d u u n d i v i d e d f a m i l y s h a l l be l i a b l e t o d e d u c t i n c o m e - t a x o n t h e s u m c r e d i t e d o r p a i d t o t he a c c o u n t o f t h e c o n t r a c t o r w h e r e s u c h s u m i s c r e d i t e d o r p a i d ex c l u s i v e l y f o r p e r s o n a l p u r p o s e s o f s u c h i n d i v i d u a l o r a n y m e m b e r o f H i n d u u n d i v i d e d f a m i l y . ( 5 ) N o d e d u c t i o n s h a l l b e m a d e f r o m t h e a m o u n t o f an y s u m c r e d i t e d o r p a i d o r l i k e l y t o b e c r e d i t e d o r p a i d to t h e a c c o u n t o f , o r t o , t h e c o n t r a c t o r , i f s u c h s u m d o e s n o t e x c e e d t h i r t y t h o u s a n d r u p e e s : P r o v i d e d t h a t w h e r e t h e a g g r e g a t e o f t h e a m o u n t s o f s u c h s um s c r e d i t e d o r p a i d o r l i k e l y t o b e c r e d i t e d o r p a i d du r i n g t h e f i n a n c i a l y e a r e x c e e d s 5 0 [ o n e l a k h] r u p e e s , t h e p e r s o n r e s p o n s i b l e f o r p a y i n g s u c h s u m s r e f e r r e d t o i n s u b - s e c t i o n ( 1 ) s h a l l b e l i a b l e t o d e d u c t i n c o m e - t a x u n d e r t h i s s e c t i o n . ( 6 ) N o d e d u c t i o n s h a l l b e m a d e f r o m a n y s u m c r e d i t ed o r p a i d o r l i k e l y t o b e c r e d i t e d o r p a i d d u r i n g t h e p r e v i o u s ye a r t o t h e a c c o u n t o f a c o n t r a c t o r d u r i n g t h e c o u r s e o f b u s i n es s o f p l y i n g , h i r i n g o r l e a s i n g g o o d s c a r r i a g e s , w h e r e s u c h c o n t ra c t o r o w n s t e n o r l e s s g o o d s c a r r i a g e s a t a n y t i m e d u r i n g t h e p r e vi o u s y e a r a n d f u r n i s h e s a d e c l a r a t i o n t o t h a t e f f e c t a l o n g w i t h hi s P e r m a n e n t A c c o u n t N u m b e r , t o t h e p e r s o n p a y i n g o r c r e d i t i n g su c h s u m . ( 7 ) T h e p e r s o n r e s p o n s i b l e f o r p a y i n g o r c r e d i t i n g a n y s u m t o t h e p e r s o n r e f e r r e d t o i n s u b - s e c t i o n (6 ) s h a l l f u r n i s h, t o t h e p r e s c r i b e d i n c o m e - t a x a u t h o r i t y o r t h e p e r s o n a u t h or i s e d b y i t , s u c h p a r t i c u l a r s , i n s u c h f o r m a n d w i t h i n s u c h t i m e a s m a y b e p r e s c r i b e d . ” 1 8 . N o w c o m i n g t o t h e d r a f t a g r e e m e n t e n t e r e d i n t o b y t h e a s s e s s e e w i t h t h e m i l l e r s , c o p y o f w h i c h h a s b e e n p l a c e d b y t h e D e p a r t m e n t a t p a g e 2 7 o f t h e i r p a p e r b o o k , w h e r e i n , t h e f o l l o w i n g c l au s e ( 8 ) i s r e l e v a n t : - 8 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. “ 8 . T h e b y - p r o d u c t s v i z . B r o k e n r i c e , r i c e k a n i , Ph u k (r i c e h u s k ) e t c . o b t a i n e d d u r i n g t h e m a n u f a c t u r e o f r i c e s h a l l b e t h e p r o p e r t y o f t h e m i l l e r a n d t h e G o v e r n m e n t / P r o c u r i n g A g e n c y s h a l l h a v e n o r i g h t o r r e s p o n s i b i l i t y i n t h i s r e g a r d . ” 1 9 . A s p e r t h e a b o v e c l a u s e ( 8 ) , t h e b y- p r o d u c t o b ta i n e d d u r i n g t h e m a n u f a c t u r e o f r i c e s h a l l b e p r o p e r t y o f t h e m i l l e r a n d t h e G o v e r n m e n t / P r o c u r e m e n t A g e n c i e s w i l l h a v e n o r i g h t o r r e s p o n s ib i l i t y i n t h i s r e s p e c t . T h e P r o c u r e m e n t A g e n c y g e t s t h e p a d d y m i l l e d o r t o s a y g e t s t h e r i c e m a n u f a c t u r e d o u t o f t h e r a w m a t e r i a l ( p a d d y) o n b e ha l f o f t h e G o v e r n m e n t o f In d i a / F C I. F o r t h e s a i d p u r p o s e , t he p r o c u r e m e n t a g e n c y e n t e r s i n t o a n a g r e e m e n t w i t h t h e m i l l e r . T h e m i l l in g c h a r g e s a r e f i x e d b y t h e G o v e r n m e n t o f In d i a . It i s n o t i n t h e h a n d s o f t h e p r o c u r e m e n t a g e n c i e s o r m i l l e r s t o n e g o t i a t e o n t h e c o n s i d e r a t io n p a ya b l e f o r ‘ m i l l i n g c h a r g e s ’ . A d m i t t e d l y, f o r t h e ye a r u n d e r c o n s i d e r a ti o n , m i l l i n g c h a r g e s h a v e b e e n f i x e d @ R s . 1 5 / - p e r q u i n t a l . T h e o u t - t u rn r a t i o h a s a l s o b e e n f i x e d , w h i c h m e a n s t h a t t h e m i l l e r h a s t o r e t u r n 67 % o f t h e m a n u f a c t u r e d r i c e , i r r e s p e c t i v e o f t h e f a c t t h a t t h e yi e l d o f ri c e m a n u f a c t u r e d w a s l o w o r h i gh f r o m t h e p a d d y e n t r u s t e d t o h i m ; w h i c h o f co u r s e , n o t o n l y d e p e n d s u p o n t h e v a r i e t y a n d q u a l i t y o f p a d d y b u t al s o o n t h e c l i m a c t i c c h a n g e s . U n d e r t h e c i r c u m s t a n c e s , t h e n a t u r e o f c o nt r a c t , i n o u r v i e w , i s n o t p u r e l y a w o r k c o n t r a c t r a t h e r i t i s s o m e t h i n g mo r e t h a n t h a t . In t h i s c o n t r a c t , t h e m i l l e r h a s n o c h o i c e t o s a y t h a t h e wi l l r e t u r n t h e r i c e a s w e l l a s t h e b y- p r o d u c t s a s p e r t h e o u t c o m e o f t h e ac t u a l m i l l i n g o f t h e p a d d y a n d t h a t h e w i l l o n l y c l a i m t h e m i l l i n g c h a r ge s . T h e r e i s n o o p t i o n f o r t h e m i l l e r t o s a y t h a t o w i n g t o t h e v a r i e t y / qu a l i t y o f t h e p a d d y o r o t h e r c i r c u m s t a n c e s , t h e yi e l d o f m a n u f a c t u r e d r i c e w a s l e s s a n d t h a t h e w a s l i a b l e t o r e t u r n w h a t h e a c t u a l l y g o t a f t e r m i ll i n g o r t o s a y t h a t h i s w o r k w a s o n l y o f t h e m i l l i n g o f t h e p a d d y a n d t h a t h e w a s n o t l i a b l e f o r t h e yi e l d c o m i n g o u t o f t h e p a d d y, u n l e s s a n d u n t i l s o m e d e f i c i e n c y e i t h e r i n s e r v i c e o r o t h e r w i s e i s a t t r i b u t a b l e o n hi s p a r t . N o s u c h c h o i c e i s a v a i l a b l e t o t h e m i l l e r s . A n o t h e r i m p o r t a n t f a c to r i n t h i s c a s e i s t h a t 9 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. n e i t h e r t h e G o v e r n m e n t o f In d i a / F C I i s i n t e r e s t e d t o r e c e i v e b a c k / r e t u r n o f t h e b y- p r o d u c t o f t h e p a d d y n o r t h e P r o c ur i n g A g e n c i e s w h o g e t s t h e r i c e s h e l l i n g o n b e h a l f o f t h e G o v e r n m e n t o f Ind i a . A s n o t e d a b o v e , i t h a s b e e n m e n t i o n e d i n t h e s p e c i f i c t e r m ‘ t h a t t h e by- p r o d u c t i s t h e p r o p e r t y o f t h e m i l l e r ’ w h i c h m e a n s t h a t t h e p r o p e rt y i n t h e b y- p r o d u c t p a s s e s i m m e d i a t e l y t o t h e m i l l e r o n t h e v e r y c o m i n g o f i t i n t o e x i s t e n c e . T h o u g h , b e f o r e t h e m i l l i n g o f t h e p a d d y, t h e G o v e r nm e n t / p r o c u r e m e n t a g e n c i e s r e m a i n t h e o w n e r o f t h e p a d d y, h o w e v e r , t he m o m e n t t h e p a d d y i s m i l l e d , t h e G o v e r n m e n t / p r o c u r e m e n t a g e n c i e s l os e t h e i r o w n e r s h i p a n d c o n t r o l o v e r t h e p a d d y a n d t h e b y- p r o d u c t b u t ha v e r i g h t o n l y o n t h e ‘ m i l l e d r i c e ’ f o r w h i c h t h e y p a y a s t i p u l a t e d a m o u nt o f R s . 1 5 / - a s m i l l i n g c h a r g e s . T h e r e l e v a n t w o r d s i n t h e c l a u s e ( 8 ) o f t he A g r e e m e n t t h a t “t h e G o v e r n m e n t / P r o c u r i n g A g e n c y s h a l l h a v e n o r i g h t or r e s p o n s i b i l i t y i n t h i s r e g a r d” s p e a k s t h a t t o r e t a i n t h e b y- p r o d u c t c a n n o t a l w a ys s a i d t o b e ‘ r i g h t ’ o v e r a t h i n g b u t s o m e t i m e s i t b e c o m e s a ‘ r es p o n s i b i l i t y’ a l s o a n d t h e G o v e r n m e n t / P r o c u r e m e n t A g e n c i e s a r e n o t w i l l in g t o o w n t h i s r e s p o n s i b i l i t y. T h i s d e c i s i o n i s t a k e n b y t h e a g e n ci e s p e r h a p s o n t h e g r o u n d t h a t t h e y w a n t t o e s c a p e t h e r e s p o n s i b i l i t y o f p r o c u r e m e n t o f t h e b y- p r o d u c t , t r a n s p o r t i n g t h i s b y- p r o d u c t a n d e v e n se l l i n g t h i s b y- p r o d u c t , w h e n t h e y, t h e m s e l v e s , a r e n o t s u r e a b o u t t h e f e t c ha b l e m a r k e t v a l u e o f t h i s t yp e o f b y- p r o d u c t . H e n c e , t o g e t r i d o f t h i s r e s p o n s i b i l i t y a n d i n t h e i r b u s i n e s s i n t e r e s t , t h e y d o n o t w a n t t o t a k e ba c k / r e t a i n t h e b y- p r o d u c t a n d , t h e r e f o r e , i t i s s p e c i f i c a l l y a g r e e d th a t t h e b y- p r o d u c t w i l l b e t h e p r o p e r t y o f t h e m i l l e r . T h e b y- p r o d u c t i s a g r e ed t o b e k e p t w i t h t h e m i l l e r a s p e r t h e p o l i c y o f t h e G o v e r n m e n t a n d t h e re i s n o o p t i o n t o t h e m i l l e r e v e n t o s a y t h a t i t w i l l n o t r e t a i n t h e b y- pr o d u c t o r t o d e m a n d a n y s u m m o r e t h a n t h e f i x e d r a t e o n a c c o u n t o f m i l l i n g. T h e r e i s n o s u c h o p t i o n a v a i l a b l e t o t h e m i l l e r . U n d e r t h e c i r c u m s t an c e s , a s c o n t e n d e d b y t h e Ld . D R a l s o , t h o u g h t h e m i l l i n g c h a r g e s a r e f ix e d t a k i n g i n t o c o n s i d e r a t i o n t h e f a c t t h a t t h e b y- p r o d u c t h a v e a l so s o m e m a r k e t a b l e 10 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. v a l u e , h o w e v e r , t h e v a l u e o f t h e b y- p r o d u c t a s p e r t h e t e r m o f t h e a g r e e m e n t e n t e r e d i n t o b y t h e p r o c u r e m e n t a g e n c i e s w i t h t h e m i l l e r s , c a n n o t s a i d t o b e a c o n s i d e r a t i o n f o r t h e w o r k c o n tr a c t o f m i l l i n g o f t h e p a d d y. T h e s e c a s e s a r e o f p e c u l i a r c i r c u m s t a n c e s , wh e r e t h e a s s e s s e e / a v a i l e r o f s e r v i c e s i s n o t i n t e r e s t e d i n r e t a i n i n g t h e b y- p r o d u c t . E v e n a s p e r a g r e e m e n t , t h e p r o c u r e m e n t A g e n c y / a s s e s s e e n ev e r b e c o m e s t h e o w n e r o f t h e b y- p r o d u c t . T h e v e r y p o i n t o f c o m i n g in t o e x i s t e n c e o f t h e b y- p r o d u c t , t h e s a m e r e m a i n s t h e p r o p e r t y o f t h e m il l e r . W h e n a s p e r t h e t e r m s o f t h e a g r e e m e n t , t h e b y- p r o d u c t i s n e v e r i n vo l v e d t o b e t h e p r o p e r t y o f t h e p r o c u r e m e n t a g e n c i e s , u n d e r t h e c i rc u m s t a n c e s , i t c a n n o t b e s a i d t h a t t h e s a i d b y- p r o d u c t h a s b e e n h a n d e d o ve r a s c o n s i d e r a t i o n i n k i n d b y t h e p r o c u r e m e n t a g e n c i e s t o t h e m i l l e r s . W he n o n e i s n o t t h e o w n e r o f t h e p r o d u c t a n d t h e p r o p e r t y i n t h e p r o d u ct h a s n e v e r p a s s e d o n t o t h a t p e r s o n , h e , u n d e r t h e c i r c u m s t a n c e s , c a n n ot p a s s t h e s a m e t o t h e o t h e r s . T h e p r o p e r t y i n t h e b y- p r o d u c t f r o m t h e v e ry i n c e p t i o n r e m a i n s w i t h t h e m i l l e r a n d , h e n c e , t h e s a m e c a n n o t b e s a i d t o b e a s c o n s i d e r a t i o n r e c e i v e d b y t h e m i l l e r . In t h e p e c u l i a r f a c t s a n d ci r c u m s t a n c e s o f t h i s m i l l i n g c o n t r a c t , t h o u g h t h e c o n s i d e r a t i o n i s f i x e d t a k i n g i n t o c o n s i d e r a t i o n o t h e r f a c t o r s , t h e l i k e l y b e n e f i t t h at t h e m i l l e r w i l l g e t o u t o f m i l l i n g p r o c e s s i n t h e f o r m o f b y- p r o d u c t s , h o w ev e r , s u c h b e n e f i t s c a n n o t b e s a i d t o b e c o n s i d e r a t i o n f o r t h e c o n t r a c t. A s o b s e r v e d a b o v e , t h o u g h s u c h b e n e f i t m a y b e o f w o r t h v a l u e t o t h e m il l e r , b u t i t m a y p r o v e t o b e a l i a b i l i t y t o t h e P r o c u r e m e n t a g e n c i e s , h e n ce , t a k i n g i n t o c o n s i d e r a t i o n t h e p e c u l i a r c i r c u m s t a n c e s a n d i n t h e i n t e r e s t o f b u s i n e s s , a d e c i s i o n h a s b e e n a r r i v e d a t b y t h e G o v e r n m e n t o f In d i a n o t t o t a k e r e s p o n s i b i l i t y o f t h e b y- p r o d u c t , t h e r e b y , a l s o l os i n g a n y r i g h t s i n t h e s a i d b y- p r o d u c t . A s o b s e r v e d a b o v e , i f t h e c o n t e n ti o n o f t h e R e v e n u e i s t o b e a c c e p t e d , t h e n u n d e r t h e c i r c u m s t a n c e s , t h e mi l l e r c a n i n s i s t u p o n t o s a y t o t h e o t h e r p a r t y t h a t h e i s n o t i n t e r e s t e d i n r e t a i n i n g t h e b y- p r o d u c t o r t o n e go t i a t e o n t h e m i l l i n g c h a r g e s o r t o c l a i m h i g h e r m i l l i n g c h a r g e s , 11 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. i r r e s p e c t i v e o f t h e v a l u e o f t h e b y- p r o d u c t e i t h e r a t a n e g o t i a b l e r a t e o r a t f i x e d r a t e . H o w e v e r , a s o b s e r v e d a b o v e , n e i t h e r s uc h a n o p t i o n i s a v a i l a b l e t o t h e m i l l e r u n d e r t h e c o n t r a c t n o r t h e p r o p e r t y i n t h e b y- p r o d u c t , a n y t i m e c o m e s i n t o t h e o w n e r s h i p o f t h e pr o c u r e m e n t a g e n c y. H e n c e , i n v i e w o f t h i s , n e i t h e r t h e v a l u e o f t h e b y- p r o d u c t c a n b e s a i d t o b e c o n s i d e r a t i o n f o r t h e w o r k c o n t r a c t n o r t h e p r o vi s i o n s o f s e c t i o n 1 9 4 C o f t h e A c t w i l l b e a p p l i c a b l e i n t h i s r e s p e c t . M o r eo v e r , a s p o i n t e d o u t i n t h e C A G r e p o r t ( s u p r a ) a n d a s d i s c u s s e d a b o v e , t h e v a l u e o f t h e b y- p r o d u c t i s n o t a s c e r t a i n e d t o t h e G o v e r n m e n t , t h o u gh t h e G o v e r n m e n t t h r o u gh i t s a g e n c i e s s u c h a s T a r i f f C o m m i s s i o n o r th e o f f i c e o f t h e C A G h a s t r i e d t o a s c e r t a i n t h e v a l u e o f t h e b y- p r o d u c t a n d t h e r e a f t e r t o r e v i s e t h e m i l l i n g c h a r g e s a c c o r d i n gl y. H o w e v e r , t i l l d a te , t h e G o v e r n m e n t h a s f a i l e d t o a s c e r t a i n t h e s a m e . T h e m i l l i n g c h a r g e s as f i x e d i n t h e ye a r 2 0 0 5 a r e c o n t i n u e d a s s u c h . T h i s f a c t a l s o s h o w s t h a t i n t h e a b s e n c e o f a n y a s c e r t a i n e d / c o n f i r m e d d a t a r e g a r d i n g t h e m a r k e t a bl e v a l u e o f t h e b y- p r o d u c t , t h e G o v e r n m e n t h a s o p t e d n o t t o c l a i m a n y o w n e r s h i p o v e r i t a n d t h e r e b y e v e n n o t a n y r i g h t o r r e s p o n s i b i l i t y i n r e sp e c t o f i t . U n d e r t h e c i r c u m s t a n c e s , e v e n w h e n t h e m a r k e t v a l u e o f t h e b y- p r o d u c t i s n o t a s c e r t a i n a b l e , h e n c e , t h e p r o c u r e m e n t a g e n c i e s w i l l n o t o t h e r w i s e w i l l b e i n a p o s i t i o n t o d e d u c t T D S b y a s s u m i n g a n y v a l u e of s u c h b y- p r o d u c t . 2 0 . N o w c o m i n g t o t h e r e l i a n c e p l a c e d b y t h e Ld . D R i n t h e c a s e o f ‘ K a n c h a n g a n g a S e a F o o d s Lt d . v s C IT ’ ( s u p r a ) , t h e b r i e f f a c t s o f t h e c a s e o f ‘ K a n c h a n g a n g a S e a F o o d s Lt d . v s C I T , ’ a s e x t r a c te d f r o m t h e d e c i s i o n o f t h e S u p r e m e C o u r t , w e r e a s u n d e r : - “ 2 . F a c t s g i v i n g r i s e t o t h e p r e s e n t a p p e a l s a r e t h a t th e a p p e l l a n t M / s . K a n c h a n g a n g a S e a F o o d s L i m i t e d i s a c o m p a n y i nc o r p o r a t e d i n I n d i a a n d e n g a g e d i n s a l e a n d e x p o r t o f s e a f o o d a n d f o r t h a t p u r p o s e o b t a i n e d p e r m i t t o f i s h i n t h e e x c l u s i v e e co n o m i c z o n e o f I n d i a . T o e x p l o i t t h e f i s h i n g r i g h t s , t h e a p p e l l a n t- c o m p a n y ( h e r e i n a f t e r r e f e r r e d t o a s t h e " a s s e s s e e " ) e n t e r e d i n t o a n a g r e e m e n t d a t e d 7 t h M a r c h , 1 9 9 0 c h a r t e r i n g t w o f i s hi n g v e s s e l s i . e . , t w o p a i r s o f B u l l T r a w l e r s , w i t h E a s t w i d e S h ip p i n g C o . (H K ) 12 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. L t d . a n o n - r e s i d e n t c o m p a n y i n c o r p o r a t e d i n H o n g K on g . C l a u s e 4 o f a g r e e m e n t w h i c h i s r e l e v a n t f o r t h e p u r p o s e r e a ds a s f o l l o w s : - " 4 . D e p o n e n t O w n e r s t o p r o v i d e : T h e D e p o n e n t O w n e r s w i l l p r o v i d e f i s h i n g v e s s e l s , as a p p r o v e d b y G o v e r n m e n t o f I n d i a , f o r a l l i n c l u s i v e c h a r t e r f e e o f U S $ 6 0 0 , 0 0 0 . 0 0 p e r v e s s e l p e r a n n u m . T h e c h a r t e r f e e i s i n c l u s i v e o f f u e l c o s t , m a i n t e n a n c e r e p a i r s , w a g e s , f o o d f o r t h e c r e w a n d a n y o t h e r e x p e n s e s i n c u r r e d i n c o n n e c t i o n w i t h t h e o p e ra t i o n o f t h e v e s s e l . T h e y w i l l p r o v i d e t r a i n i n g t o t h e I n d i a n c re w i n a l l a s p e c t s o f f i s h i n g t e c h n i q u e s , m a i n t e n a n c e a n d r u n n i n g o f th e e n g i n e . I n a d d i t i o n : a ) T h e D e p o n e n t O w n e r s s h o u l d p a y t h e c h a r t e r e r s R s. 7 5 , 0 0 0 / - o r 1 5 % o f t h e g r o s s v a l u e o f t h e c a t c h w h i c h e v e r i s m or e . 1 b ) A n n u a l c h a r t e r f e e s h a l l b e m a x i m u m o f U S $ 6 0 0 ,0 0 0 p e r v e s s e l p e r a n n u m p a y a b l e b y w a y o f 8 5 % o f g r o s s e a r n i n g f ro m t h e f i s h s a l e s s u b j e c t t o t h e c o n d i t i o n t h a t t h i s w i l l n o t ex c e e d 8 5 % o f t h e s a l e s v a l u e o f t h e c a t c h p e r v e s s e l p e r a n n u m o n v oy a g e t o v o y a g e b a s i s . M i n i m u m 1 5 % o f t h e e a r n i n g b y w a y o f s a l e s va l u e o f c a t c h o f f i s h s h o u l d a c c r u e t o t h e c h a r t e r e r . P a y m e n t t o t h e D e p o n e n t O w n e r s s h o u l d n o t e x c e e d t h e a b o v e c h a r t e r f e e . c ) E x p o r t v a l u e o f c a t c h f r o m t h e c h a r t e r e d v e s s e l s s h o u l d n o t b e l o w e r t h a n t h e p r e v a i l i n g i n t e r n a t i o n a l m a r k e t p r i ce a t t h e t i m e o f e x p o r t . " T h u s , a c c o r d i n g t o t h e t e r m s o f t h e a g r e e m e n t t h e Ea s t w i d e S h i p p i n g C o . ( H K ) L t d . , t h e o w n e r o f t h e f i s h i n g T r aw l e r s ( h e r e i n a f t e r r e f e r r e d t o a s t h e " n o n r e s i d e n t c o m p a ny " ) w a s t o p r o v i d e f i s h i n g T r a w l e r s t o t h e a s s e s s e e f o r a l l i nc l u s i v e c h a r t e r f e e o f U S $ 6 0 0 , 0 0 0 p e r v e s s e l p e r a n n u m . I n t e r m s o f th e a g r e e m e n t t h e a s s e s s e e w a s t o r e c e i v e R s . 7 5 , 0 0 0 / - o r 1 5 % o f th e g r o s s v a l u e o f c a t c h , w h i c h e v e r i s m o r e . T h e c h a r t e r f e e w a s p a y a bl e f r o m e a r n i n g f r o m t h e s a l e o f f i s h a n d f o r t h a t p u r p o s e 8 5 % o f th e g r o s s e a r n i n g s f r o m t h e s a l e o f f i s h w a s t o b e p a i d t o t h e n o n - r e si d e n t c o m p a n y . ” 2 1 . A p e r u s a l o f t h e a b o v e r e v e a l s t h a t i n t h e c a s e o f ‘ K a n c h a n g a n g a S e a F o o d s Lt d . v s C IT ’ , a s p e r t h e t e r m s o f t h e a g r e e m e n t , i t w a s a g r e e d b e t w e e n t h e a s s e s s e e a n d t h e n o n - r e s i d e n t c o m p a n y th a t n o n - r e s i d e n t c o m p a n y, w h o w a s t h e o w n e r o f t h e f i s h i n g v e s s e l s , w i l l p r o v i d e t h e s a m e 13 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. t o t h e a s s e s s e e a t t h e i n c l u s i v e c h a r t e r f e e o f U S $ 6 , 0 0 , 0 0 0 p e r v e s s e l p e r a n n u m . T h e h i r i n g c h a r g e s w e r e t h u s q u a n t i f i e d i n te r m s o f m o n e y, w h i c h w i l l b e p a ya b l e b y h i m b y w a y o f 8 5 % o f gr o s s e a r n in gs f r o m t h e f i s h s a l e s a n d s u b j e c t t o t h e c o n d i t i o n t h a t t h i s w i l l no t e x c e e d 8 5 % o f t h e s a l e v a l u e o f t h e c a t c h p e r v e s s e l p e r a n n u m o n v o ya g e t o v o ya g e b a s i s , w h i c h m e a n s t h a t t h o u g h t h e h i r i n g / u s a g e c h a r g e s o f t h e v e s s e l w e r e f i x e d a t U S $ 6 , 0 0 , 0 0 0 p e r v e s s e l , t h e m o d e o f r e c o v e r y w a s t h r o u g h s a l e p r i c e o f t h e 8 5 % o f t h e t o t a l c a t c h , h o w e v e r , i f t h e 8 5 % of t h e t o t a l c a t c h i s n o t e n o u gh t o r e a l i z e t h e m a x i m u m v a l u e o f U S $ 6 , 0 0 , 0 00 , t h e o w n e r o f t h e v e s s e l w i l l n o t b e e n t i t l e d t o c l a i m m o r e c a t c h o r m o r e p r i c e , i t h a s t o r e s t r i c t t h e h i r i n g c h a r g e s t o t h e s a l e v a l u e o f 8 5% o f t h e c a t c h . F u r t h e r , i t h a d b e e n a g r e e d t h a t t h e a s s e s s e e ‘ K a n c h a n g a n g a S e a F o o d s Lt d ’ ( s u p r a ) w o u l d r e c e i v e m i n i m u m 1 5 % o f t h e e a r n i n g b y s a l e v al u e o f c a t c h o f f i s h . It w a s f u r t h e r a g r e e d t h a t t h e p a ym e n t t o t h e o w n e r o f t h e v e s s e l , h o w e v e r , w i l l n o t e x c e e d t h e a b o v e s a i d a g r e e d c h a rt e r f e e o f U S $ 6 , 0 0 , 0 0 0 , w h i c h m e a n s t h a t t h e c o n s i d e r a t i o n w a s se t t l e d a t s a l e p r i c e o f 8 5 % o f t h e c a t c h b u t m a x i m u m t o t h e e x t e n t o f U S $ 6, 0 0 , 0 0 0 . H o w e v e r , i f t h e s a l e p r i c e o f 8 5 % o f t h e c a t c h w o u l d e x c e e d U S $ 6 , 0 0 , 0 0 0 , t h e n t h e e x c e e d e d a m o u n t w i l l n o t b e r e t a i n e d b y t h e a s s e s s ee a n d n o t b y t h e o w n e r o f t h e v e s s e l . S i m i l a r l y, m i n i m u m o f 1 5 % o f th e e a r r i n g f r o m t h e s a l e o f f i s h w o u l d b e r e t a i n e d b y t h e a s s e s s e e , h o we v e r , i t c o u l d e x c e e d f r o m t h a t , i f t h e v a l u e o f t h e s a l e p r i c e o f t h e r em a i n i n g 8 5 % o f t h e c a t c h w o u l d e x c e e d U S $ 6 , 0 0 , 0 0 0 . In t h e s e c i r c u m s t a n c e s , t h e c o n s i d e r a t i o n w a s s e t t le d i n m o n e t a r y t e r m s a n d s u b j e c t t o a f o r e s a i d e x c e p t i o n s . It w a s n o t t h e c a s e t h a t t h e c o n s i d e r a t i o n i n k i n d w a s p a s s e d o n t h e n o n - r e s i d e nt o w n e r i r r e s p e c t i v e o f t h e s a l e v a l u e o f t h e c a t c h . T h e s a l e v a l u e i n m o n e t a r y t e r m s o f t h e c a t c h w a s t h e d e t e r m i n i n g f a c t o r f o r t h e c o n s i d e r a ti o n t o b e p a s s e d . H e n c e , u n d e r t h e c i r c u m s t a n c e s i t c a n n o t b e s a i d t ha t t h e c o n s i d e r a t i o n w a s p a s s e d i n k i n d , r a t h e r , i t w a s p a s s e d i n t e r m s o f t h e m o n e t a r y v a l u e o f 14 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. t h e s a l e p r i c e r e c e i v e d f r o m t h e c a t c h , s u b j e c t t o t h e c o n d i t i o n t h a t i t w o u l d n o t b e m o r e t h a n U S $ 6 , 0 0 , 0 0 0 . In t h e a f o r e sa i d c a s e o f ‘ K a n c h a n g a n g a S e a F o o d s Lt d . ’ , t h e a s s e s s e e , K a n c h an g a n g a S e a F o o d s Lt d . , r e m a i n e d t h e o w n e r o f t h e c a t c h u n t i l i t s s a le v a l u e w a s r e a l i z e d a n d h a d r i g h t t o r e t a i n t h e r e a l i z e d v a l u e t h a t w a s m o re t h a n U S $ 6 , 0 0 , 0 0 0 a n d a t t h e s a m e t i m e i t w a s e n t i t l e d t o r e t a i n t h e s a l e v a l u e o f t h e 1 5 % c a t c h , e v e n t h o u g h , t h e s a l e v a l u e o f t h e r e m a i n i n g 8 5 % o f t h e p u r c h a s e w o u l d f e t c h l e s s t h a n U S $ 6 , 0 0 , 0 0 0 . It w a s t h e s a l e v a l u e o f t h e c a t c h w h i c h w a s t h e d e t e r m i n i n g f a c t o r a n d t i l l t h e c a t c h w a s n o t s o l d o r i t s v a l u e w a s n o t d e t e r m i n e d , t h e p r o p e r t y i n t h e c a t c h f i s h w o u l d r e m a i n u n d e r t h e o w n e r s h i p o f t h e a s s e s s e e ‘ K a n c h a n g a n g a Se a F o o d s Lt d ’ . H o w e v e r , i n t h e c a s e i n h a n d , t h e n e i t h e r t h e P r o c ur e m e n t a g e n c y b e c o m e s t h e o w n e r o f t h e b y- p r o d u c t n o r t h e r e i s a ny a s c e r t a i n a b l e v a l u e o f t h e b y- p r o d u c t . E v e n , t h e P r o c u r e m e n t A g e n c i e s ha v e n e i t h e r a n y i n c l i n a t i o n t o k n o w t h e p r i c e o f t h e b y- p r o d u c t n o r t h e y h a v e r i g h t t o c l a i m a n y a m o u n t o u t o f t h e v a l u e o f t h e b y- p r o d u c t o n t h e g r o u n d t h a t i t s s a l e v a l u e h a s e x c e e d e d t h e m i l l i n g c h a r g e s . In v i ew o f t h e a b o v e d i s c u s s i o n , t h e c a s e l a w i n t h e c a s e o f ‘ K a n c h a n g a ng a S e a F o o d s Lt d. ’ i s n o t a p p l i c a b l e o n t h e f a c t s o f t h e p r e s e n t c a s e . 2 2 . S o f a r a s t h e q u e s t i o n t h a t w h e t h e r t h e p r o v i s io n s o f s e c t i o n 1 9 4 C o f t h e A c t w i l l b e a t t r a c t e d o n l y i n c a s e t h e c o n s id e r a t i o n i s p a s s e d t o t h e c o n t r a c t o r i n c a s h o r i n a n y o t h e r i d e n t i c a l / s i m il a r m o d e , s u c h a s , b y c h e q u e s , d r a f t , m o n e y o r d e r o r o t h e r e l e c t r o n i c m o de b u t n o t i n r e s p e c t o f c o n s i d e r a t i o n p a i d ‘ i n k i n d ’ i s c o n c e r n e d , w e a r e of t h e v i e w , t h a t i t c a n n o t b e h e l d s t r a i g h t a w a y i n a l l t h e c a s e s t h a t p r o v i s i o n s w i l l n o t a p p l y f o r c o n s i d e r a t i o n p a s s e d ‘ i n k i n d ’ . It a l l d e p e n d s u p o n t h e r e l e v a n t f a c t s o f e a c h c a s e . If t h e c o n s i d e r a t i o n o r t h e v a l u e o f t h e c o n s i d e r a t i o n f o r t h e ‘ w o r k c o n t r a c t ’ i s s e t t l e d i n m o n e t a r y t e r m s , o r at a v a l u e o f m o n e y, i t w i l l b e i m m a t e r i a l i f t h e r e a f t e r t h e c o n s i d e r a t i o n i s p a s s e d i n m o n e t a r y t e r m s o r ‘ i n k i n d . ’ . S u p p o s e , t h e c o n s i d e r a t i o n i n t h e c o n t r a c t i s s e t t l e d 15 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. a t a c e r t a i n p r i c e a n d i n s t e a d o f p a yi n g t h e s a i d pr i c e i n c a s h o r t h r o u g h b a n k i n g c h a n n e l , s u c h a s , b y w a y o f c h e q u e / d r a f t / R T G S e t c . , t h e a v a i l e r o f t h e s e r v i c e s / a s s e s s e e p a ys / t r a n s f e r v a l u a b l e g o o d s o f t h e e q u a l m o n e t a r y v a l u e t o t h e c o n t r a c t o r s u c h a s g o l d o r a n y o t h e r p r e c i o u s m e t a l o r a n yt h i n g e l s e h a v i n g a l m o s t e q u a l m o n e t a r y v a l u e a t w h i c h t h e p r i c e w a s s e t t l e d , t o s a y t h a t t h e p r o v i s i o n s o f s ec t i o n 1 9 4 w i l l n o t b e a t t r a c t e d i n t h a t c a s e , w i l l b e a g a i n s t t h e s p i r i t , i n t e n t a n d p u r p o s e o f s e c t i o n 1 9 4 C o f t h e A c t a n d s u c h a n i n t e r p r e t a t i o n w i l l d e f e a t t h e r e a l i n t e n t a n d p u r p o s e o f t h e p r o v i s i o n s . A n o t h e r i m p o rt a n t f a c t o r t o b e t a k e n i n t o c o n s i d e r a t i o n i s t h a t t h e a s s e s s e e m u s t b e t h e o w n e r / s h o u l d h a v e t h e a u t h o r i t y t o p a s s o n t h e c o n s i d e r a t i o n ‘ i n k i n d’ t o t h e c o n t r a c t o r . A s d i s c u s s e d a b o v e , i n t h i s c a s e , t h e p r o p e r t y i n t h e b y- p r o d u c t s c o m e s i n t o o w n e r s h i p o f t h e m i l l e r s f r o m t h e v e r y p o i n t o f c o mi n g o f i t i n t o e x i s t e n c e , h e n c e , i n t h i s c a s e t h e a s s e s s e e s w e r e no t t h e o w n e r s o f t h e b y- p r o d u c t s . A n o t h e r f a c t o r f o r c o n s i d e r a t i o n i s t h a t t h e p r o p e r t y p a s s e d ‘ i n k i n d ’ s h o u l d h a v e s o m e a s c e r t a i n a b l e a n d d e t e r m i n a bl e v a l u e , w h i c h c a n b e t a k e n a s p a r t o f t h e c o n s i d e r a t i o n p a i d f o r t h e w o r k d o n e . F u r t h e r , i t i s t h e n a t u r e o f t h e c o n t r a c t , t e r m o f t h e a g r e e m e n t , t h e i n t e n t i o n o f t h e p a r t i e s a n d o v e r a l l f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e w h i c h a r e r e q u i r e d t o b e a n a l yz e d a n d c o n s i d e r e d f o r d e t e r m i n i n g w h e t he r t h e p r o v i s i o n s o f s e c t i o n 1 9 4 C o f t h e A c t o r o t h e r s i m i l a r p r o v i s i o n s o f t h e C h a p t e r w o u l d b e a t t r a c t e d o r n o t i n a p a r t i c u l a r c a s e . A s d i s c us s e d a b o v e i n d e t a i l , s i n c e w e h a v e h e l d t h a t t h e p r o p e r t y i n t h e b y- p r o du c t w a s n o t p a s s e d o n b y t h e a s s e s s e e / P r o c u r e m e n t A g e n c i e s a s m i l l i n g ch a r g e s , h e n c e , i t i s h e l d t h a t T D S p r o v i s i o n s o f s e c t i o n 1 9 4 C a r e n o t a tt r a c t e d i n t h i s c a s e . T h i s i s s u e i s d e c i d e d i n f a v o u r o f t h e a s s e s s e e s / P r o c u r e m e n t A g e n c i e s . 2 3 . E v e n o t h e r w i s e , w h i l e r e l yi n g u p o n t h e d e c i s i o n o f t h e H o n ' b l e D e l h i B e n c h o f t h e T r i b u n a l i n t h e c a s e o f ‘ M / s A a ha r C o n s u m e r P r o d u c t s P v t . Lt d . ’ ( s u p r a ) , t h e i s s u e i n t h e p r e s e n t a p p e a ls h a s a l r e a d y b e e n d e c i d e d i n f a v o u r o f t h e a s s e s s e e a n d t h e Ld . C IT ( A) i n t h i s c a s e h a s 16 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. f o l l o w e d t h e a f o r e s a i d d e c i s i o n s o f t h e T r i b u n a l in v a r i o u s c a s e s a n d D e p a r t m e n t , a s s u b m i t t e d b e f o r e u s , h a s n o t a g i t a t ed t h e i s s u e b e f o r e h i gh e r J u d i c i a l a u t h o r i t y, a n d e v e n i n t h e a b s e n c e o f a n y c o n t r a r y d e c i s i o n o f t h e h i g h e r J u d i c i a l F o r u m d i r e c t l y o n t h i s i s s u e , t h e i s s u e i s o t h e r w i s e c o v e r e d i n f a v o u r o f t h e a s s e s s e e b y t h e v a r i o u s d i r e c t d e c i s i o n s o f t h e C o o r d i n a t e B e n c h e s o f t h e T r i b u n a l o n t h i s is s u e . In v i e w o f t h i s , w e d o n o t f i n d a n y i n f i r m i t y i n t h e o r d e r o f t h e C IT ( A ) w h i l e a l l o w i n g t h e a p p e a l s o f t h e a s s e s s e e . 2 4 . In t h e r e s u l t , a l l t h e a p p e a l s o f t h e R e v e n u e be a r i n g IT A N o s .1 3 0 9 & 1 3 1 0 / C h d / 2 0 1 6 , 1 3 1 2 t o 1 3 1 4 / C h d / 2 0 1 6 , 7 8 / C h d / 2 0 18 , 3 1 6 t o 3 2 5 / C h d / 2 0 1 8 , 7 7 / C h d / 2 0 1 8 , 3 3 6 / C h d / 2 0 1 8 , 1 2 4 1 & 1 2 42 / C h d / 2 0 1 6 , 6 8 5 & 6 8 6 / C h d / 2 0 1 8 a n d 1 6 2 / C h d / 2 0 1 6 , t h u s , h a v i n g n o m e r i t s a r e d i s m i s s e d . ” Therefore, respectfully following the decision of coordinate benches (supra) and in absence of any distinguishing facts pointed out by the revenue, the appeal of the revenue is hereby dismissed. 4. In the result, the appeal of the revenue is dismissed. Order pronounced on 26.04.2022. Sd/- Sd/- ( DIVA SINGH ) (VIKRAM SINGH YADAV) याय क सद य/Judicial Member लेखा सद य/Accountant Member Dated: 26 .04.2022 *Das* 17 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd. आदेश क % त&ल'प अ*े'षत/ Copy of the order forwarded to : 1. अपीलाथ+/ The Appellant 2. %,यथ+/ The Respondent 3. आयकर आय ु -त/ CIT 4. आयकर आय ु -त (अपील)/ The CIT(A) 5. 'वभागीय % त न0ध, आयकर अपील य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File # $ स / By order, सह (ंज / Assistant Registrar Draft dictated 22.04.2022 Sr.PS Draft placed before author 25.04.2022 Sr.PS Approved Draft comes to the Sr.PS/PS 26.04.2022 Sr.PS Order signed and pronounced on File sent to the Bench Clerk 27.04.2022 Sr.PS Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order. 18 ITA No. 1450/Chd/2019 M/s. Punjab State Civil Supplies Corpn. Ltd.