SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., Jaipur V. DCIT, Sikar

ITA 277/JPR/2013

• Counselvise Citation: 27723114 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Keywords: Non-deduction of tax

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 277/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANG LTD. , N.H.11, P.O. PALSANA, SIKAR CUKE VS. THE DCIT CIRCLE- SIKAR SIKAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AABASO 852 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 382/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE DCIT CIRCLE- SIKAR SIKAR CUKE VS. SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANG LTD. , N.H.11, P.O. PALSANA, SIKAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AABASO 852 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/07/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21/07/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THESE ARE CROSS APPEALS FILED BY ASSESSEE AND REVE NUE, AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 28-01-20 13 FOR THE ASSESSMENT YEAR 2008-09. ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 2 2.1 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN IT S APPEAL. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N HOLDING THE CESS PAID TO RCDF IS IN THE NATURE OF F EES FOR PROFESSIONAL FOR TECHNICAL SERVICES, LIABLE FOR DED UCTION OF TAX U/S 194J LAND THEY CONFIRMING THE ACTION OF THE AO IN HOLDING THAT THE SAME IS NOT ALLOWABLE U/S 40(A)(IA ) OF THE ACT SINCE THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THAT MILK PURCHASE DIFFERENCE PAID TO MI LK SOCIETIES IS COMMISSION, LIABLE FOR DEDUCTION OF TA X U/S 194H AND THEREBY CONFIRMING THE ACTION OF THE AO IN HOLD ING THAT THE SAME IS NOT ALLOWABLE U/S 40(A)(IA) OF THE ACT SINCE THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE. 2.2 THE REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL. (1) THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW RESTRICTING THE DISALLOWANCE OF RS. 42,41,575/- MAD E U/S 40(A)(IA) TO RS. 97,110/- ONLY AND THUS IN DELETING THE DISALLOWANCE OF RS. 41,44,465/-. (II) THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW RESTRICTING THE DISALLOWANCE OF RS. 54,73,480/- MAD E U/S 40(A)(IA) TO RS. 2,42,809/- ONLY AND THUS, IN DELET ING THE DISALLOWANCE OF RS. 52,30,671/-. (III) THE LD. CIT(A) HAS ERRED IN RELYING UPON THE DECISION OF HON'BLE ITAT JAIPUR BENCH IN CASE OF M /S. JVNL VS. DCIT (ITA NO. 132/JP/2009 DATED 30-04-2009 FOR A.Y. 2006-07) EVEN WHEN THIS DECISION WAS BASED ON DIFF ERENT FACTS AND CIRCUMSTANCES OF A UNRELATED ASSESSEE AND EVEN WHEN THE APPEAL BEFORE THE HON'BLE HIGH COURT WAS P ENDING IN THAT CASE. (IV) THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO THE AMOUNT REMAINING UNPAID AT THE END OF THE YEAR AND DIRECTED THE ASSESSING OFFICER TO VERI FY THIS. ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 3 (V) THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 4.52 LACS AND IN HOLDING THAT T HIS EXPENDITURE WAS RELATED TO PURCHASE OF GOODS AND DI D NOT ATTRACT THE PROVISIONS F SECTION 40(A)(IA) OF THE A CT . 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COOPERATIVE SOCIETY WHICH PURCHASES MILK FROM PRIMARY COOPERATIVE SOCIE TY AT VILLAGE LEVEL WHICH IS PASTEURIZED AND SOLD TO CONSUMER. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE AO MADE VARIOUS DISALLO WANCE. THE ASSESSEE PAID CESS @ 1.25% TO RCDF A PARENT COOPERATIVE SOCI ETY WHICH ACCORDING TO THE AO, CONSTITUTED COMMISSION/ BROKER AGE LIABLE FOR TDS U/S 194H OF THE ACT. THE ASSESSEE WAS FOLLOWING ITS CONSISTENT PAST PRACTICE AND DID NOT DEDUCT TDS HOLDING IT TO BE A STATUTORY PAYMENT NOT LIABLE FOR TDS. THE AO HOWEVER HELD IT TO BE LIABLE FOR TDS, AS IT WAS NOT DEDUCTED, DISALLOWED THE SAME U/S 40(A)(IA) R.W .S. 194H OF THE ACT . 3.2 IN FIRST APPEAL, THE LD. CIT(A) TOOK A DIFFEREN T OPINION AND HELD THE CESS PAID TO RCDF AS FEES FOR MANAGERIAL SERVICES L IABLE FOR TDS U/S 194J OF THE ACT AND NOT U/S 194H AS HELD BY THE AO. HOW EVER LD CIT(A) REDUCED THE DISALLOWANCE BY RELYING ON JUDGMENT OF M/S. MERILYN SHIPPING & TRANSPORT (70 DTR 81) (VIZAG) SB AND JAI PUR BENCH IN THE CASE OF JVVNL (SUPRA) THAT PROVISIONS OF SECTION 40 (A)(IA) ARE APPLICABLE ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 4 QUA THE OUTSTANDING PAYMENTS AT THE END OF THE YEAR . LD. AO WAS DIRECTED TO VERIFY THE OUTSTANDING AMOUNT PAYABLE TO RCDF AN D ALLOW THE EXPENDITURE TO THAT EXTENT. BOTH THE PARTIES ARE IN APPEAL. THE ASSESSEE IS BY WAY OF GROUND NO. 1 AND REVENUE IS BY WAY OF GRO UND NO. 1. 3.3 THE AO FURTHER ENQUIRED INTO THE CLAIM OF EXPEN DITURE OF RS. 54,73,480/- ON ACCOUNT OF MILK PURCHASE DIFFERENCE CESS. THE ASSESSEE FILED DETAILED REPLY CONTENDING THAT THE AMOUNT WAS PAID @ 2.5% TO DISTRICT PRIMARY COOPERATIVE SOCIETIES (FOR SHORT DPCS') FOR MAINTAINING THEIR ACTIVITIES OF COLLECTING MILK AN D TO PRIMARY DISTRICT COOPERATIVE SOCIETY (FOR SHORT PDCS) @ 2% ON MI LK PURCHASED. SINCE THE PAYMENT WAS MADE TO THESE SOCIETIES FOR M AINTAINING THE COOPERATIVE ACTIVITIES OF THE SOCIETIES AND MEETING THEIR EXPENSES, THE PAYMENTS WERE NOT LIABLE FOR TDS PROVISIONS. THE AO HOWEVER, HELD IT TO BE LIABLE FOR TDS U/S 194H OF THE ACT BY FOLLOWING OBSERVATIONS. 6THIS AMOUNT IS NOT PASSED ON TO THE CATTLE OWNERS WHO SUPPLY THE MILK BUT IT IS RETAINED BY T HESE SAMITIES FOR MEETING THEIR EXPENSE. THESE SAMITIES RENDER SERVIC ES TO THE ASSESSEE BECAUSE THEY COLLECT MILK FROM THE CATTLE OWNERS AND SUPPLY THE SAME TO ASSESSEE. THE PAYMENT IS BADE ON QUANTUM OF PURCHASE THROUGH THESE SAMITIES AS IT IS A FIXED PE RCENTAGE. THE EXPENDITURE IS OBVIOUSLY IN THE NATURE OF COMMISSIO N/ BROKERAGE AS UNDERSTOOD IN COMMON PARLANCE AND ALSO AS PER THE I NCLUSIVE DEFINITION GIVEN IN THE EXPLANATION TO SECTION 194H . SINCE THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE ON THE PAYMENT, EXPENDITURE IS DISALLOWED U/S 40(A)(IA) OF THE ACT. THIS RESULTS IN AN ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 5 ADDITION OF RS. 54,73,480/- TO THE DECLARED INCOME OF THE ASSESSEE. 3.4 IN FIRST APPEAL, THE LD. CIT(A) THOUGH HELD THA T PAYMENT WAS LIABLE FOR TDS U/S 194H, HOWEVER, APPLYING THE JUDGMENT OF M/S. MERILYN SHIPPING(SUPRA), HELD THAT THE AMOUNT TO THE EXTENT OF OUTSTANDING AS ON 31-03-2008 RS. 2,42,809/-WAS LIABLE FOR DISALLOWANC E, CONSEQUENTLY DISALLOWANCE U/S 40(A)(IA) R.W.S. 194H WAS RESTRICT ED TO THIS AMOUNT. BOTH THE PARTIES ARE IN APPEAL. THE ASSESSEE IS BY WAY O F GROUND NO. 2 AND REVENUE IS BY WAY OF GROUND NO. 2. 3.5 THE GROUND NO. 3 AND 4 OF THE REVENUE ARE CONNE CTED WITH GROUND NO. 1 AND 2 INASMUCH AS TO GROUND NO. 3 AND 4 ARE IN SUPPORT OF THE CONTENTION THAT THEORY OF PAID AND PAYABLE IN V IEW OF SB JUDGMENT IN THE CASE OF MERILYN SHIPPING & TRANSPORT (SUPRA) AS APPLIED BY THE LD. CIT(A) IS NOT TENABLE. 3.6 THE REMAINING GROUND NO. 5 OF THE DEPARTMENT IS IN RESPECT OF DELETING THE DISALLOWANCE OF RS. 4.52 LACS BY HOLDI NG THAT THIS EXPENDITURE WAS RELATED ONLY TO PURCHASE OF GOODS AND DID NOT A TTRACT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. LD. AO DISALLOWED TH E FOLLOWING AMOUNTS U/S 40(A)(IA): ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 6 NAME OF PARTIES AMOUNT PAID RCDF LTD. 3,62,111/- BANSAL PRINTERS 66,312/- MAHALAXMI WELDING WORKS SHOP 24,410/- TOTAL 4,52,833/- 3.7 THE LD. CIT(A) DELETED THIS DISALLOWANCE BY FOL LOWING OBSERVATIONS. 04. THE NEXT GROUND OF APPEAL IS AGAINST THE DISA LLOWANCE OF SALES PROMOTION EXPENSES TO THE EXTENT OF RS. 4,52, 833/- 04.1 APPELLANT CLAIMED THE EXPENDITURE OF RS. 5,07, 114/- UNDER THE HEAD SALES PROMOTION. AS PER THE DETAILS FILED BY THE APPELLANT, A SUM OF RS. 3,62,111/- WAS PAID TO RCDF, RS. 66,31 2/- WAS PAID TO BANSAL PRINTERS AND RS. 24,410/- WAS PAID TO M/S . MAHALAXMI WELDING WORKSHOP FOR ADVERTISEMENT. AO DISALLOWED T HESE EXPENDITURE U/S 40(A)(IA) SINCE NO TAX WAS DEDUCTED AT SOURCE ON THESE PAYMENTS. 04.2 LD. AR SUBMITTED THAT THE ADVERTISEMENT CHARGE S WAS ACTUALLY INCURRED BY RCDF AND DUE TDS WAS MADE BY R CDF AT THE TIME OF MAKING PAYMENT TO RESPECTIVE PARTIES. T HE APPELLANT REIMBURSED THE EXPENSES TO RCDF WHO HAS FILED THE R ETURN SHOWING SUCH RECEIPTS. LD A.R. CLAIMED THAT THE LIABILITY T O MAKE TDS WAS ON RCDF AND NOT ON THE APPELLANT. IT WAS ALTERNATIV ELY CLAIMED THAT SINCE THE ENTIRE PAYMENT WAS MADE DURING THE Y EAR ITSELF, PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE ON THESE PAYMENTS. IN RESPECT OF PAYMENTS MADE TO BANSAL PRINTERS AND M/S. MAHALAXMI WELDING WORKSHOP, LD. AR PRODUCED THE REL EVANT INVOICES TO SHOW THAT THE PAYMENTS WERE MADE FOR TH E PURCHASE OF PRINTED BANNERS AND IRON FRAME. THE PAYMENT WAS NOT FOR THE ADVERTISEMENT. 04.3 ON DUE CONSIDERATION OF THE APPELLANTS ARGUMEN TS AND THE EVIDENCES PRODUCED, THE DISALLOWANCE MADE BY AO U/S 40(A)(IA) IN ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 7 RESPECT OF AFORESAID EXPENDITURE, IS DELETED. THE PAYMENTS MADE TO RCDF IS NOT DISALLOWABLE SINCE THE ENTIRE PAYMENT W AS MADE DURING THE YEAR ITSELF, AS HELD BY HON'BLE ITAT JA IPUR IN THE CASE OF M/S. JVVNL (SUPRA). THE PAYMENTS MADE TO M/S. BA NSAL PRINTERS AND M/S. MAHALAXMI WELDING WORKSHOPS WAS F OR THE PURCHASE OF GOODS AND NOT FOR ADVERTISEMENT. HENCE, THE GROUND RAISED BY THE APPELLANT IS ALLOWED. 3.8 AGGRIEVED, THE REVENUE IS IN APPEAL. 3.9 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT: - 1. IN PURSUANCE OF THESE OBJECTIVES, RCDF DEVELOP ED DAIRY MARKET, COORDINATED WITH GOVERNMENT/ FINANCIA L INSTITUTIONS, FINALIZED RATE CONTRACT, DEVELOPED THE BRAND IMAGE, LAUNCHES NEW PRODUCTS, DEVELOP MIS SYSTEM ETC. TO RECOVER PART O F THE EXPENDITURE INCURRED BY IT FOR ALL THESE ACTIVITIES , IT LEVY A CESS OF 1.25% OF THE TURNOVER OF THE DISTRICT SOCIETIES. TH US, NO SPECIFIC SERVICE IS RENDERED BY THE RCDF TO SOCIETIES. ONE C ANNOT IDENTIFY THAT PAYMENT MADE BY THE SOCIETY AS CESS TO RCDF IS FOR ANY PARTICULAR SERVICE MORE SO MANAGERIAL SERVICE. IN F ACT, RCDF DO NOT PROVIDE ANY MANAGERIAL SERVICE AS SUCH TO THE S OCIETY, RATHER IT ONLY DEVELOP THE MARKET, BRAND, LIAISON WITH GOVERN MENT/ INSTITUTIONS, IDENTIFY THE NEW PRODUCT ETC. IN GENE RAL. THEREFORE, CESS PAID TO RCDF IS NOT LIABLE FOR DEDUCTION OF TA X AT SOURCE EITHER U/S 194H AS HELD BY AO OR U/S 194J AS HELD B Y CIT(A). 2. SIMILAR DISALLOWANCE WAS MADE BY THE AO IN CASE OF ALWAR ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. FOR A. Y.S 2004-05 TO 2006-07 FOR ALLEGED NON-DEDUCTION OF TAX AT SOUR CE U/S 194J ON PAYMENT OF CESS TO RCDF. ON APPEAL, THE LD. CIT(A) VIDE ORDER DT. 29.03.2010 IN APPEAL NO. 250 TO 252/09-10 (PB 17-19 ) DELETED THE DISALLOWANCE BY GIVING THE FOLLOWING FINDINGS:- THE PAYMENT OF CESS MADE BY THE ASSESSEE TO RCDF IS IN THE NATURE OF REIMBURSEMENT OF EXPENSES, WHEREUPON NO LIABILITY TO DEDUCTION OF TAX ARISES. THEREFORE, NO LIABILITY CA N BE FASTENED UPON ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 8 THE ASSESSEE WITHIN THE MEANING OF SECTION 194J OF THE INCOME TAX ACT, 1961. 3.10 APROPOS GROUND NO. 2 I.E. MILK PRICE DIFFERENC E, THE ASSESSEE CONTENDS THAT THE AO HAS MISCONCEIVED ENTIRE ISSUE WHILE HOLDING THAT SOCIETY PAYS THE AMOUNT TO CATTLE OWNERS. THE FACT OF THE MATER IS THAT MILK PRICE DIFFERENCE IS PAID TO PRIMARY COOPERATIV E SOCIETIES AND NOT THE CATTLE OWNERS AS HELD BY AO. THE LD. AR OF THE ASSE SSEE CONTENDED TO THIS EFFECT AS UNDER:- 1. IT MAY BE NOTED THAT ASSESSEE PURCHASES THE MI LK FROM VARIOUS PRIMARY CO-OPERATIVE SOCIETIES WHO RAI SES THE BILL FOR THE MILK AND FOR THEIR MARGIN NAMED MILK PRICE DIFFERENCE. THESE PRIMARY CO-OPERATIVE SOCIETIES A RE CONSTITUTED BY THE MILK PRODUCERS FOR THE PURPOSE O F COLLECTIVE DISPOSAL OF MILK PRODUCE BY THEM. THE AS SESSEE SOCIETY PURCHASES MILK DIRECTLY FROM THE PRIMARY SO CIETIES ON PRINCIPAL TO PRINCIPAL BASIS. THEREFORE, THE PAYMEN T OF THE MILK TO THE PRIMARY CO-OPERATIVE SOCIETIES ALONG WI TH THE FIXED MARGIN CALLED MILK PRICE DIFFERENCE IS ONLY A PAYMENT TOWARDS PURCHASE OF MILK AND NOT A PAYMENT OF ANY COMMISSION OR BROKERAGE SINCE THE TRANSACTION IS BE TWEEN PRINCIPAL TO PRINCIPAL. COMMISSION IS PAID TO A PER SON WHEN HE ACTS ON BEHALF OF OTHER PERSON. IN SUCH A CASE, THE PAYMENT FOR VALUE OF THE GOODS OR SERVICE IS MADE D IRECTLY TO THE OWNER OF GOODS/ PROVIDER OF SERVICE AND THE PAY MENT OF COMMISSION IS MADE SEPARATELY TO THE PERSON WHO IS ACTING ON BEHALF OF THE OWNER OF GOODS OR PROVIDER OF SERV ICE. IN THE PRESENT CASE, THE ASSESSEE IS MAKING PAYMENT OF THE MILK TO THE PRIMARY SOCIETY AND NOT TO THE CATTLE OWNERS. T HEREFORE, THE OBSERVATION OF THE AO THAT THE ASSESSEE PURCHAS ES MILK FROM INDIVIDUAL CATTLE OWNERS IS FACTUALLY INCORREC T. THE ASSESSEE PURCHASE THE MILK FROM THE PRIMARY SOCIETY WHO PURCHASES THE MILK FROM THE CATTLE OWNERS AND THERE FORE ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 9 PAYMENT OF MILK IS MADE BY THE ASSESSEE TO THE PRIM ARY SOCIETY AND NOT TO THE CATTLE OWNERS. HOW THE PRIMA RY SOCIETIES MAKE PAYMENT TO THE CATTLE OWNERS OR FROM WHOM AND AT WHAT RATE THE PRIMARY CO-OPERATIVE SOCIETY P ROCURES THE MILK IS THERE OUTLOOK WITH WHICH THE ASSESSEE I S NOT AT ALL CONCERNED. THE PAYMENT OF FIXED MARGIN TO THE PRIMA RY SOCIETY IS THEREFORE NOT A PAYMENT OF COMMISSION AS ENVISAGED U/S 194H OF THE ACT. 3.11 APROPOS DEPARTMENTAL GROUNDS ON THE THEORY OF PAID AND PAYABLE, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT MERI LYN SHIPPING & TRANSPORT VS. ACIT JUDGMENT HAS BEEN UPHELD BY HON' BLE ALLAHBAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVIC ES LTD. REVENUES SLP AGAINST THE SAME ALSO HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT, THUS THE ISSUE STANDS SETTLED IN FAVOR OF TH E ASSESSEE. CONSEQUENTLY, THERE IS NO MERIT IN REVENUES GROUND. 3.12 THE LD. DR IS HEARD 3.13 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. APROPOS THE PAYMENT TO RCDF CE SS, IT HAS NOT BEEN DEMONSTRATED BY THE DEPARTMENT THAT ANY MANAGERIAL SERVICES IN THIS CONNECTION HAVE BEEN RENDERED TO ASSESSEE BY RCDF Q UA THIS AMOUNT. RCDF IS AN APEX COOPERATIVE BODY AND CESS IS PAID T O IT BY VIRTUE OF FEDERAL STRUCTURE IN RAJASTHAN COOPERATIVE SET UP. THUS AS FAR AS ASSESSEE'S BUSINESS IS CONCERNED, THERE IS NO RENDERING OF ANY MANAGERIAL SERVICES BY ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 10 RCDF AS ALLEGED BY THE AO U/S 194H AND UPHELD LD. C IT(A) U/S 194J. SINCE THERE IS NO RENDERING OF ANY SERVICES AND THE PAYMENT IS NOT MADE FOR ANY MANAGERIAL SERVICES TO RCDF, THEREFORE, PAY MENT CAN NEITHER BE HELD AS LIABLE FOR TDS U/S 194H OF THE ACT AS COMMI SSION/ BROKERAGE AS HELD BY THE AO NOR U/S 194J FOR RENDERING ANY MANAG ERIAL SERVICES AS HELD BY THE LD. CIT(A). IN VIEW THEREOF, WE HOLD THAT AS SESEES IMPUGNED PAYMENTS TO RCDF ARE NOT LIABLE FOR TDS. THIS GROUN D OF THE ASSESSEE IS ALLOWED. 3.14 APROPOS PAYMENT FOR MILK PRICE DIFFERENCE, THE ASSESSEE SOCIETY DOES NOT PURCHASE MILK FROM CATTLE OWNERS AS MISTAK ENLY HELD BY LD. AO. SINCE THE LIABILITY HAS BEEN FASTENED UNDER MISCONC EPTION OF FACTS, WE HOLD THAT THIS PAYMENT ALSO IS NOT LIABLE U/S 194H OF THE ACT. IN VIEW THEREOF, SECOND GROUND OF THE ASSESSEE WITH REGARD TO DISALLOWANCE U/S 40(A)(IA) STANDS ALLOWED. 3.15 SINCE I HAVE HELD THAT THERE NO TDS LIABILITY ON THE ASSESSEE QUA THESE PAYMENTS, CONSEQUENTLY, REVENUES GROUNDS IN THIS BEHALF REGARDING APPLICABILITY OF MERILYN SHIPPING & TRANSPORT VS. A CIT (SUPRA) BECOME IRRELEVANT. 3.16 APROPOS GROUND NO. 5 OF THE REVENUE RELATING T O THE AMOUNT PAID TO BANSAL PRINTERS AND M/S. MAHALAXMI WELDING WORKS HOP FOR PURCHASES ITA NO. 277/JP/2013 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. VS. DCIT, CIRCLE- SIKAR . 11 OF GOODS AND REMAINING AMOUNT OF RS. 3,62,111/- BEI NG REIMBURSEMENT OF EXPENSES, THE LD. CIT(A) HAS RIGHTLY HELD THAT THIS AMOUNT IS NOT LIABLE FOR TDS. HIS ORDER IS UPHELD. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 /07/ 2015 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /07/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKRI SANGH LTD., SIKAR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT , CIRCLE- SIKAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.277/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR