ADDL CIT (TDS) RG2, MUMBAI V. KODAK INDIA P. LTD, MUMBAI

ITA 568/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88183 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2015
• Appeal Filed By: Department
• Bench Allotted: I
• Next Hearing Date: 29-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2011
• Court: TRIBUNAL
• Department Lawyers: IN L AW IN GIVING RELIEF TO
• Keywords: Non-deduction of tax
• Section: 133A; 133(6); 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.568/MUM/2011 ASSESSMENT YEAR: -2009-10 DEPUTY COMMISSIONER OF INCOME TAX (TDS) -2(1), ROOM NO. 702, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI 400 002. VS.` M/S KODAK INDIA PVT. LTD. 3 RD FLOOR, KALPATARU SYNERGY, VAKOLA, SANTACRUZ (EAST) MUMBAI 400 055. PAN: - AA ACK2172J APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER DATED 29.10.2010 OF CIT(A) FOR A.Y. 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THIS APPEAL:- 1. (I) THE LD. CIT (A) HAS ERRED ON FACTS AND IN L AW IN GIVING RELIEF TO THE ASSESSEE BY HOLDING THAT TOS IS NOT DEDUCTIBLE ON SUPPLY OF BATTERIES MANUFACTURED BY POWERCELL BATTERIES INDIA LTD., WITHOUT PROPERLY AP PRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE LD. A.O. IN ORDER CLS. 201 (1)/201 (1A) OF THE INCOME-TAX ACT, 1961. REVENUE BY SHRI VIJAY KUMAR BORA ASSESSEE BY SHRI DIPAL J. SHUKLA DATE OF HEARING 12.01.2015 DATE OF PRONOUNCEMENT 21.01.2015 KODAK INDIA PVT. LTD. 2 | P A G E (II) THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN GIVING RELIEF TO THE ASSESSEE BY HOLDING THAT TOS IS NOT DEDUCTIBLE ON SUPPLY OF CAM ERAS MANUFACTURED BY HICAL MAGNETIC PVT. LTD., WITHOUT PROPERLY APPRECIATING T HE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE LD. A.O. IN ORDER U/S. 201 (1)/201 (1A) OF THE INCOME-TAX ACT, 1961. (III) THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN GIVING RELIEF TO THE ASSESSEE BY HOLDING THAT TOS IS NOT DEDUCTIBLE ON PAYMENT MA DE TO CUSTOMS HOUSE AGENTS (CHA) ON ACCOUNT OF REIMBURSEMENT OF 'CLEARING AND FORWARDING HARGES' WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE LD. A.O. IN ORDER U/S. 201 (1 )/ 201 (1A) OF THE INCOME- TAX ACT, 1961. 2. GROUND NO. 1 IS REGARDING NON DEDUCTION OF TDS ON TH E PAYMENT FOR SUPPLY OF BATTERIES. 3. FROM THE EXAMINATION OF TAX AUDIT REPORT, THE ASS ESSING OFFICER FOUND THAT THE ASSESSEE DEFAULTED VARIOUS TDS PROVISIONS. A CCORDINGLY A NOTICE U/S 133(6) OF INCOME TAX ACT DATED 8.08.2008 WAS ISSUED TO THE ASSESSEE. BUT NO COMPLIANCE WAS MADE BY THE ASSESSEE. THE ASSESSIN G OFFICER HAS OBSERVED THAT EVEN THE INCOME TAX INSPECTOR WAS DEPU TED TO COLLECT THE INFORMATION IN VIEW OF THE REQUIREMENT U/S 133(6). THE ASSESSEE WAS TAKING ITS OWN TIME FOR FURNISHING THE INFORMATION, ACCORD INGLY A SURVEY U/S 133A WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE. ON THE BASIS OF INFORMATION COLLECTED FROM THE SURVEY, THE ASSESSING OFFICER INTER ALIA FOUND THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH POWERCEL L BATTERIES INDIA LTD. FOR MANUFACTURING OF KODAK BRANDED BATTERIES WITH COM PLETE SPECIFICATIONS TOBE SOLD AS KODAK BATTERIES ALONG WITH CAMERA. THE A SSESSING OFFICER HELD THAT THIS AMOUNT TO A JOB CONTRACT ATTRACTING PROVI SIONS OF SECTION 190C OF THE INCOME TAX ACT. KODAK INDIA PVT. LTD. 3 | P A G E 4. ON APPEAL, THE CIT(A) HAS OBSERVED THAT THE ASSE SSEE PURCHASED THE BATTERIES FORM M/S POWERCELL BATTERIES INDIA LTD. WIT H ITS NAME KODAK PRINTED ON THE SAME AND, THEREFORE, IT WAS NOT THE WO RK CONTRACT. THE ASSESSEE HAS NOT SUPPLIED ANY RAW MATERIAL TO THE M ANUFACTURER. THE CIT(A) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED I N TREATING THE PURCHASE/SALE CONTRACT AS CONTRACT OF WORK U/S 194C . THE DEMAND RAISED BY THE ASSESSING OFFICER ON THIS ACCOUNT WAS ACCORDING LY DELETED. 5. WE HAVE HEARD THE LD. DR AS WELL AS LD. AUTHORIZED REPRESENTATIVE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. D R HAS RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE BAT TERIES ARE MANUFACTURED AS PER THE STRICT SPECIFICATION OF THE ASSESSEE AND WITH THE LOGO AND NAME OF THE ASSESSEES COMPANY. THEREFORE, IT WAS A WORK CONTRACT ATTRACTING PROVISIONS OF SECTION 194C. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS PURCHASED THE BATTERIES FROM POWERCELL BATERIES INDIA LTD WITH ASSESSEES OW N NAME PRINTED ON THE SALE. THE BATTERIES ARE TO BE SUPPLIED ALONG WITH KODAK CAMERAS, THEREFORE, ONLY BECAUSE THE ASSESSEES BRAND NAME PRINTED ON TH E BATTERIES, IT WOULD NOT AMOUNT TO JOB CONTRACT WHEN THE ASSESSEE IS NOT PROVIDING ANY RAW MATERIAL OR HAVING CONTROL OVER MANUFACTURING ACTI VITY OF THE POWERCELL BATTERIES INDIA LTD. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GLENMARK PHARMACEUTICALS LTD. 324 ITR 199. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE CONTRACT BETWEEN THE ASSES SEE AND POWERCELL KODAK INDIA PVT. LTD. 4 | P A G E BATTERIES INDIA LTD IS REGARDING MANUFACTURE OF THE BA TTERIES TO BE USED IN THE CAMERA OF THE ASSESSEES COMPANY AND, THEREFORE , AS PER THE AGREEMENT, THE BATTERIES HAVE TO BE MANUFACTURED BY THE POWERCE LL BATTERIES INDIA LTD., WITH THE NAME KODAK PRINTED ON THE CELL. IT IS ALSO N OT DISPUTED THAT THE ASSESSEE HAS NOT PROVIDED ANY RAW MATERIAL TO THE MAN UFACTURER AND THE MANUFACTURING ACTIVITY HAS BEEN CARRIED OUT BY THE M ANUFACTURER IN ITS FACTORY. THE CIT(A) HAS GIVEN IT FINDING IN PARA 6 AS UNDER:- 6. I HAVE GONE THROUGH THE ABOVE SUBMISSIONS VERY CAREFULLY AND PERUSED THE ORDER OF THE ASSESSING OFFICER. THE APPELLANT COMPA NY PURCHASES BATTERIES FROM M/S. POWER CELL BATTERY INDIA LTD., WITH ITS NAME ' KODAK' PRINTED ON .THE CELL THE ASSESSINQ ONICER HAS HELD THAT TDS WAS APPLICABLE O N THE PAYMENT MADE TO POWER CELL AS PER PROVISIONS OF SEC. 194-C AS THE P RODUCTS WERE MANUFACTURED AS PER SPECIFICATIONS OF THE APPELLANT AND IT IS A 'WO RKS CONTRACT'. THE ASSESSINQ OFFICER FURTHER OBSERVED THAT MANUFACTURING OF A BR ANDED KODAK BATTERY WITH EXCLUSIVE RIGHT OF PURCHASE HAVING A SPECIFIC CONTR OL OVER EVERY STEPS IN MANUFACTURING WITH ALL SPECIFICATIONS AND DESIGNS P ROVIDED BY KODAK POWER CELL AMOUNTS TO A WORKS CONTRACT NOT A SALE IN THIS REGARD, TILE APPELLANT SUBMITTED THAT THERE IS CONTRACT WITH THE VENDOR FOR SALE AND NOT A WORKS CONTRACT. THE APPELLANT HAS FU RNISHED COPY OF PURCHASE ORDER AND INVOICES RAISED BY POWER. CELL AS AN EVID ENCE IN SUPPORT OF ITS CONTENTION WHICH DEMONSTRATES THAT THE VENDOR WERE CHARGING SALES TAX I VAT ON SUCH SALES. THE 6. I HAVE GONE THROUGH THE ABOVE SU BMISSIONS VERY CAREFULLY AND PERUSED THE ORDER OF THE ASSESSING OFFICER. THE APP ELLANT COMPANY PURCHASES BATTERIES FROM M/S. POWER CELL BATTERY INDIA LTD., WITH ITS NAME 'KODAK' PRINTED ON .THE CELL THE ASSESSINQ ONICER HAS HELD THAT TDS WAS APPLICABLE ON THE PAYMENT MADE TO POWER CELL AS PER PROVISIONS OF SEC . 194-C AS THE PRODUCTS WERE MANUFACTURED AS PER SPECIFICATIONS OF THE APPELLANT AND IT IS A 'WORKS CONTRACT'. THE ASSESSINQ OFFICER FURTHER OBSERVED THAT MANUFAC TURING OF A BRANDED KODAK BATTERY WITH EXCLUSIVE RIGHT OF PURCHASE HAVING A S PECIFIC CONTROL OVER EVERY STEPS IN MANUFACTURING WITH ALL SPECIFICATIONS AND DESIGNS PROVIDED BY KODAK POWER CELL AMOUNTS TO A WORKS CONTRACT NOT A SALE IN THIS REGARD, TILE APPELLANT SUBMITTED THAT THERE IS CONTRACT WITH THE VENDOR FOR SALE AND NOT A WORKS CONTRACT. THE APPELLANT HAS FU RNISHED COPY OF PURCHASE ORDER AND INVOICES RAISED BY POWER. CELL AS AN EVID ENCE IN SUPPORT OF ITS KODAK INDIA PVT. LTD. 5 | P A G E CONTENTION WHICH DEMONSTRATES THAT THE VENDOR WERE CHARGING SALES TAX / VAT ON SUCH SALES. THE SAID TWO MANUFACTURERS PURCHASES RAW MATERIAL OF THEIR OWN AND MANUFACTURE PRODUCT WHICH IS SOLD TO THE APPELL ANT. THE MANUFACTURER MANUFACTURES THE ITEMS IN HIS OWN PLANT AND AT HIS OWN RISK AND THEREAFTER SELLS THE SAME. THE PROPERTY IN THE GOODS AND THE DELIVER Y OF THE POSSESSION IS GIVEN TO THE ASSESSEE AT THE ULTIMATE POINT OF TIME. MERELY BECAUSE THE LOGO OF KODAK IS PRINTED ON THE BATTERY DOES NOT CONVERT ITS SALE CO NTRACT INTO A WORKS CONTRACT. THE APPELLANT FURTHER SUBMITTED THAT IT HAS NO CONT ROL OVER THE MANUFACTURING PROCESS, THE FUNDING OF THE ASSESSING OFFICER THAT THE APPELLANT HAS CONTROL OVER IN MANUFACTURING, IS FACTUALLY INCORRECT. THE APPE LLANT PLACED RELIANCE ON THE FOLLOWING DECISIONS AND CBDT'S CIRCULARS: I. CIRCULAR NO.681 DATED 8.3.1994 ISSUED BY CBDT (2 06 ITR ST.PG.299). II. CIRCULAR NO.13 OF 2006 DATED 13.12.2006 (2871TR ST. PG. 174) III. BOA LTD. VS. ITO (TDS) - 281 ITR 99 (BOM.) IV, CIT VS. DABUR INDIA LTD - 283 ITR 197 (DELHI) V. CIT VS. DY. CHIEF ACCTS. OFFICER - 304 ITR 17 (P &H). VI. CL T VS. REEBOK INDIA CO. (306 ITR 124) (DE!) VII. CIT VS. GIRNAR FOOD AND BEVERAGES PVT. LTD. (3 06 ITR 23)(GUJ) & CIT VS. HINDUSTAN LEVER LTD. (306 ITR 25)(GUJ) - SLP DISMIS SED 306 ITR (ST) IN VIEW OF THE ABOVE FACTS, I FIND CONSIDERABLE MER IT IN THE ARGUMENTS OF THE APPELLANT THE ISSUE INVOLVED UNDER THIS GROUND OF A PPEAL IS QUITE CLEAR IN VIEW OF THE CBDT'S CIRCULARS AS WELL AS VARIOUS DECISIONS O F COURTS INCLUDING JURISDICTIONAL HIGH COURT AS WELL AS JURISDICTIONAL TRIBUNALS. IN THE INSTANT CASE, THE FIRST AND FOREMOST THING IS THAT THE APPELLANT HAS ENTERED INTO A CONTRACT / AGREEMENT WITH VENDORS FOR PURCHASE OF KODAK BATTER IES. IT HAS NOT ENTERED INTO A WORKS CONTRACT AT 'ALL. FURTHER, THE APPELLANT HA S NOT SUPPLIED ANY RAW MATERIAL TO THE MANUFACTURER. THE MANUFACTURING ACT IVITIES HAS BEEN CARRIED OUT BY THE MANUFACTURER IN ITS FACTORY ONLY THE PRINTIN G NAME KODAK ON BATTERIES AND ALSO MANUFACTURING WITH CERTAIN SPECIFICATIONS DOES NOT CONVERT THE SALE CONTRACT INTO WORKS CONTRACT. THE MANUFACTURER ALSO PAY SALES TAX / VAT ON SUCH SALES. THE PROPERTY IN THE GOODS AND THE DELIVERY O F THE POSSESSION IS GIVEN TO THE APPELLANT AT THE ULTIMATE POINT OF SALE. IN VIEW OF THE FACTS, AND THE CBDT'S CIRCULARS AS WELL AS JUDICIAL DECISIONS ON THIS ISS UE, I AM OF THE VIEW THAT THE ACTION OF THE ASSESSING OFFICER WAS NOT JUSTIFIED E NTREATING THE PURCHASE / SALES CONTRACT AS CONTRACT FOR WORKS U/S.194-C THEREFORE, THE TRANSACTION BETWEEN THE APPELLANT AND VENDORS IS BEING TREATED AS 'SALES TR ANSACTION OR A CONTRACT FOR SALE., WHICH WILL NOT FALL UNDER THE PROVISIONS OF SEC. 194C OF THE IT ACT, AND THEREFORE, THE DEMAND RAISED BY THE ASSESSING OFFIC ER IS DELETED. KODAK INDIA PVT. LTD. 6 | P A G E 7. FROM THE FACTS AS RECORDED BY THE CIT(A), IT IS CL EAR THAT THE AGREEMENT BETWEEN THE ASSESSEE AND POWERCELL BATTERIES INDIA LT D IS NOT JOB WORK AGREEMENT BUT IT WAS SIMPLY AN AGREEMENT OF PURCHAS E FOR SPECIFIC BATTERY WITH THE NAME OF THE ASSESSEE PRINTED ON THE CELL. AN IDE NTICAL ISSUE WAS CONSIDERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. GLENMARK PHARMACEUTICALS LTD (SUPRA) IN PARA 33 AND 34 AS UNDE R:- 33. THE REASON THAT A SPECIFICATION OR REQUIREMENT IS ENUNCIATED BY THE ASSESSEE CONSTITUTES A MATTER OF BUSINESS EXPEDIENCY. A PURC HASER WHO DESIRES TO GET THE PRODUCT, WHICH HE INTENDS TO SELL UNDER HIS BRAND N AME, OR TRADEMARK, MANUFACTURED FROM A THIRD PARTY WOULD BE INTERESTED IN ENSURING THE QUALITY OF THE PRODUCT. THE TRADEMARK HAS ASSOCIATED WITH IT AN AS SURANCE OF THE QUALITY OF THE GOODS WHICH ARE MARKETED TRACEABLE TO THE ORIGIN OF THE GOODS. ASSOCIATED WITH THE TRADEMARK IS THE GOODWILL AND REPUTATION WHICH IS A SSOCIATED WITH THE MARK. THIS IS PARTICULARLY SO IN THE CASE OF A PHARMACEUTICAL PRO DUCT WHERE THE ULTIMATE CONSUMER IS LEGITIMATELY ENTITLED TO ENSURE THAT HE R HEALTH IS NOT PREJUDICED BY THE CONSUMPTION OF A PRODUCT NOT MEETING PRESCRIBED STA NDARDS. THE OWNER OF A MARK, THEREFORE, INTRODUCES SPECIFICATIONS TO ENSURE THAT THE PRODUCT MEETS THE STANDARDS JUSTIFIABLY ASSOCIATED WITH THE REPUTATION IN THE M ARK. THE SPECIFICATION ENSURES THE OBSERVANCE OF STANDARDS. SIMILARLY, A CLAUSE RELATI NG TO EXCLUSIVITY IS NOT INCONSISTENT WITH A TRANSACTION OF SALE. HERE AGAIN, MUCH DEPEND S UPON THE NATURE OF THE PRODUCT. RESTRICTIVE COVENANTS OF THIS KIND ARE INT ENDED TO PROTECT THE INTELLECTUAL AND OTHER PROPERTY RIGHTS OF A PARTY WHICH MARKETS ITS GOODS BY REQUIRING A MANUFACTURER TO OBSERVE NORMS OF SPECIFICATION AND EXCLUSIVITY. THE LAW IS, THEREFORE, CONSISTENT WITH THE TRANSACTION BEING RE GARDED AS A TRANSACTION OF SALE, PROVIDED THAT THE REQUIREMENTS OF A CONTRACT OF SAL E ARE MET. THEY ARE IN THIS CASE. THE CONTRACT ENTERED INTO BY THE ASSESSEE IS NOT A CONTRACT FOR CARRYING ON ANY WORK WITHIN THE MEANING OF SECTION 194C. CONCLUSIONS : 34. FOR THE REASONS AFORESAID, WE ARE OF THE VIEW THAT THE REVENUE WAS NOT JUSTIFIED IN TREATING THE ASSESSEE, AS AN ASSESSEE IN DEFAULT . THE TRIBUNAL WAS JUSTIFIED IN COMING TO THE CONCLUSION WHICH IT DID, THOUGH FOR T HE REASONS THAT WE HAVE INDICATED IN THIS JUDGMENT. THE TRIBUNAL HAS DURING THE COURS E OF ITS JUDGMENT OBSERVED AND RELIED UPON THE CIRCUMSTANCE THAT THE MANUFACTURER OF THE PHARMACEUTICAL PRODUCTS PAID EXCISE DUTY AND SALES TAX. THIS CIRCUMSTANCE H AS NOT BEEN REGARDED IN THIS JUDGMENT AS CONCLUSIVE FOR THE PURPOSE OF THE PRESE NT CASE. THE DECISION IN THE PRESENT CASE IS STRUCTURED, CONSISTENT WITH THE LAW LAID DOWN BY THE SUPREME COURT, BY THE PROVISIONS OF SECTION 194C, BY THE DOMINANT NATURE OF THE TRANSACTION AS EVIDENCED BY THE TERMS OF THE CONTRACT, AND THE CIR CUMSTANCES OF THE CASE. KODAK INDIA PVT. LTD. 7 | P A G E FOR THE REASONS STATED EARLIER, THE QUESTION OF LA W, AS FORMULATED SHALL STAND ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL IS DISMISSED. THERE SHALL BE NO ORDER AS TO COSTS. 8. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN VIEW OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GLENMARK PHARMACEUTICALS LTD. (SUPRA), WE DO NOT FIND ANY ERRO R OR ILLEGALITY IN THE ORDER OF CIT(A) QUA THIS ISSUE. 9. GROUND NO. 2 IS REGARDING NON DEDUCTION OF TAX IN R ESPECT OF PAYMENT MADE ON SUPPLY OF CAMERAS MANUFACTURED BY HICAL MAGN ETIC PVT. LTD. 10. THE ASSESSEE IS GETTING ITS BRAND NAME KODAK CA MERA MANUFACTURED/ASSEMBLED FROM M/S HICAL MAGNETIC PVT. LTD. UNDER AGREEMENT DATED 5.12.2005. APART FROM THE SAID AGREEMENT, A TRIP ARTITE AGREEMENT WAS ALSO ENTERED INTO AMONG ASSESSEE, HICAL MAGNETIC PVT . LTD. AND SUPPLIERS FOR SUPPLY OF CAMERA PARTS TO HICAL MAGNETIC PVT. LTD. T HE ASSESSING OFFICER HELD THAT TDS WAS OUGHT TO HAVE BEEN DEDUCTED ON THE PAYME NT MADE TO HICAL MAGNETIC PVT. LTD. FOR MANUFACTURE/ASSEMBLE OF THE C AMERAS UNDER THE AGREEMENT WHICH WAS IN THE VIEW OF THE ASSESSING O FFICER IS A CONTRACT MANUFACTURING/JOB WORK AGREEMENT. 11. THE ASSESSEE CHALLENGED THE ACTION OF ASSESSING OFFICER BEFORE THE CIT(A) AND SUBMITTED THAT IT IS ONLY A CONTRACT FOR SALE OF GOODS WHICH WERE PURCHASED BY THE ASSESSEE UNDER THE PURCHASE ORDERS AND INVOICE ON WHICH THE SALE TAX/VAT WAS CHARGED ON HICAL MAGNETIC PVT. LTD. THER EFORE, IT WAS ONLY A SALE KODAK INDIA PVT. LTD. 8 | P A G E AND PURCHASE TRANSACTION OF THE CAMERA AND NOT A WOR K CONTRACT. AS REGARDS THE TRIPARTITE AGREEMENT, THE ASSESSEE CONTENDED BEFO RE THE CIT(A) THAT IT WAS ONLY A TOOLING AGREEMENT AND NOT THE RAW MATERIAL AG REEMENT BETWEEN THE PARTIES. THE CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND HELD THAT THE ASSESSEE ENTERED INTO A CONTRACT/AGREEMENT WITH THE VENDORS FOR PURCHASE OF KODAK CAMERAS AND THIS AGREEMENT WAS NOT A WORK CONT RACT AGREEMENT. THE CIT(A) HAS FURTHER OBSERVED THAT THE ASSESSEE HAS NO T SUPPLIED ANY RAW MATERIAL TO THE MANUFACTURER. ACCORDINGLY, THE DEMAN D RAISED BY THE ASSESSING OFFICER U/S 201(1) AND 201(1A) FOR NON DEDUCTION OF T AX WAS DELETED BY THE CIT(A) IN THIS RESPECT. 12. BEFORE US, THE LD. DR HAS SUBMITTED THAT AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT, IT IS CLEAR THAT THE CAMERA IS AS SEMBLED BY HICAL MAGNETIC PVT. LTD. AS PER THE SPECIFICATIONS PROVIDED BY THE AS SESSEE. FURTHER AS PER THE TRIPARTITE AGREEMENT, THE RAW MATERIAL IS SUPPLIED UNDER THE SAID AGREEMENT AND, THEREFORE, IT WAS A JOB WORK CONTRACT ATTRACTI NG TDS PROVISIONS OF SECTION 194C OF THE INCOME TAX ACT. HE HAS RELIED UPON THE O RDER OF ASSESSING OFFICER. 13. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENT ATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS NOT PURCHASED ANY RA W MATERIAL REQUIRED FOR MANUFACTURING OF CAMERA, THEREFORE, THE ASSESSEE DO ES NOT SUPPLY ANY COMPONENT REQUIRED FOR MANUFACTURING OF THE CAMERA F OR HICAL MAGNETIC PVT. LTD. THE HICAL MAGNETIC PVT. LTD. PURCHASES RAW MATER IAL ON ITS ON ACCOUNT AND ON ITS ON COST AND CONSEQUENTLY MANUFACTURES THE CAM ERA WHICH IS SOLD TO THE CLIENTS OF THE ASSESSEE. THE CAMERAS ARE SUPPLIED A S PER THE INVOICE RAISED BY THE HICAL MAGNETIC PVT. LTD. ON WHICH SALE TAX AND VA T IS PAID AS PER THE INVOICE KODAK INDIA PVT. LTD. 9 | P A G E VALUE, THEREFORE, IT WAS ONLY AN AGREEMENT OF PURCH ASE AND NOT A JOB WORK CONTRACT. HE HAS REITERATED THE CONTENTIONS AS RAI SED BEFORE THE CIT(A) AND SUBMITTED THAT THE TRIPARTITE AGREEMENT IS ONLY WITH REGARD TO THE TOOLS/MOULDS USED FOR MANUFACTURING OF CAMERA PARTS ARE GIVEN TO THE SUPPLIERS OF THE CAMERA PARTS TO MAINTAIN THE SPECIFICATIONS AND SEC RECY OF THE MOULDS OF THE ASSESSEES PRODUCT, THEREFORE, THIS FACTOR CANNOT CH ANGE THE SALE CONTRACT INTO WORK CONTRACT . HE HAS ALSO SUBMITTED THAT THE ASSES SEE HAS PROVIDED THE FILM TO BE SUPPLIED ALONG WITH CAMERA AND, THEREFORE, THE FILM PROVIDED BY ASSESSEE WOULD BE A RAW MATERIAL FOR MANUFACTURING OF CAMERA. HE HAS RELIED UPON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GLENMARK PHARMACEUTICALS LTD. (SUPRA). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. IT IS NOT A SIMPLE CASE OF PURCHASE OF CAME RA BY THE ASSESSEE FROM HICAL MAGNETIC PVT. LTD. BUT THE PROCESS OF GETTING THE CA MERA MANUFACTURED INVOLVES THE ARRANGEMENT OF RAW MATERIAL UNDER THE TRIPARTITE AGREEMENT AS WELL AS PROVIDING FINANCIAL ASSISTANCE TO THE HICAL MAGNET IC PVT. LTD. BY THE ASSESSEE. THEREFORE, THE ISSUE REQUIRES PROPER ANALYSIS OF TH E ARRANGEMENT UNDER THE TWO TYPES OF AGREEMENT. AS PER THE SUPPLY AGREEMENT DATED 5 DECEMBER 2005 BETWEEN THE ASSESSEE AND HICAL MAGNETIC PVT. LTD., TH E RECITAL OF THE AGREEMENT READS AS UNDER:- THIS AGREEMENT, HAVING AN EFFECTIVE DATE OF DEC EMBER 5 TH 2005, IS MADE AND ENTERED INTO BY AND BETWEEN: KODAK INDIA PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT, 1956 AND WHOSE REGISTERED OFFICE IS AT 02 ND FLOOR, KALPATARU SYNERGY, SANTA CRUZ (EAST), MUMBAI 400 0 55. (HEREIN KODAK) KODAK INDIA PVT. LTD. 10 | P A G E AND HICAL MAGNETIC PVT. LTD., A COMPANY INCORPORATED UN DER THE LAWS OF THE REPUBLIC OF INDIA AND WHOSE REGISTERED OFFICE IS AT SURVEY NOS 46, 47 (PART), ELECTRONICS CITY, HOSUR ROAD, BANGALORE- 5 60 100, INDIA (HEREIN HICAL) WHEREAS HICAL WOULD ASSEMBLE AND PACKAGE KB10 CAMERA S AND KODAK DESIRES TO ACQUIRE SUCH CAMERAS FOR SALE IN KODAKS ASSIGN ED SUBSIDIARIES, AFFILIATES AND/OR DISTRIBUTORS. 15. THUS THE AGREEMENT WAS ENTERED INTO FOR ASSEMBLE AND PACKAGING OF KB- 10 CAMERS BY HICAL MAGNETIC PVT. LTD. AND THE ASSESSE E AGREED TO ACQUIRE THE CAMERAS FOR SALE. AS PER CLAUSE 25 OF THE AGREEMENT THE HICAL MAGNETIC PVT. LTD. STATED TO HAVE ACTED AS INDEPENDENT CONTRACTOR AS UNDE R:- 25. INDEPENDENT CONTRACTOR HICAL SHALL ACT AS AN INDEPENDENT CONTRACTOR AND NO THING HEREIN SHALL BE CONSTRUED TO MAKE HICAL , OR ANY OF ITS EMPLOYEES, OFFICERS, DIRECTORS OF REPRESENTATIVES, THE AGENT EMPLOYEE OR SERVANT OF K ODAK. 16. THE PRICE OF THE CAMERA ASSEMBLED BY HICAL IS AG REED UPON AS PER APPENDIX B OF THE AGREEMENT DATED 5.12.2005, AS UNDER :- PRODUCT PRICING KB-10 (HICAL BANGALORE) SL. COST DETAILS STATUS HICAL OEM INR KODAK INDIA PVT. LTD. 11 | P A G E VOLUME ASSUMPTION 600K 1. LABOR & BURDEN 20.83 2. MATERIAL TOTAL 110.00 3. SCRAP INCL. ABOVE 4. PROFIT 8.05 5. PKG (NO BATTERIES) 25.00 6 VENDROS QUOTE (W/O TAXES & DUTIES 163.88 7 WORKING CAPITAL 4.89 NOTE A) THE PRICE DOES INCLUDE DUTIES & TAXES (EXCIS E DUTY AND SALES TAX) B) WORKING CAPITAL TOBE PROVIDED/FUNDED BY KODAK. O THERWISE, KODAK WILL REIMBURSE RS. 4.89 PER CAMERA. C) CENVAT PAID FOR FILMS NEEDS TO BE SET OFF FROM T HE EXCISE AMOUNT CHARGED BY HICAL ADJUSTED D) PRICE IS EX-WORKS HICAL E) FILM WILL BE CONSIGNED FREE OF COST TO HICAL. ALL DUTIES, TAXES AND FREIGHT ON THE FILM WILL BE BORNE BY KODAK. 17. AS PER THE PRODUCT PRICING ARRANGEMENT BETWEEN THE PARTIES, HICAL MAGNETIC PVT. LTD. HAS CHARGED THE PRICE WITH COST + RS. 8.05 MARK UP PER CAMERA. APART FROM THIS, THE ASSESSEE HAS TO PROVIDE THE WORKING CAPITAL AND IN THE ABSENCE OF WHICH THE COST OF WORKING CAPITAL WI LL BE REIMBURSED AT RS. 4.89 PER CAMERA. THUS IT IS CLEAR THAT EITHER THE ASSESS EE HAS TO PROVIDE THE WORKING CAPITAL WHICH THE ASSESSEE PROVIDED IN THIS CASE OR T HE ASSESSEE HAS TO REIMBURSE THE WORKING CAPITAL COST TO HICAL MAGNETI C PVT. LTD. APART FROM COST OF MATERIAL, LABOR AND PROFIT OF RS. 8.05 PER CAMERA . MUCH EMPHASIS HAS BEEN GIVEN BY THE ASSESSEE AS WELL AS BY THE CIT(A) THAT THE ASSESSEE HAS NOT SUPPLIED THE RAW MATERIAL FOR MANUFACTURE/ASSEMBLE O F CAMERA TO HICAL MAGNETIC PVT. LTD, HOWEVER, IT IS PERTINENT TO NOTE THAT IT WAS A TERM OF KODAK INDIA PVT. LTD. 12 | P A G E AGREEMENT AS PER CLAUSE 2.2 OF APPENDIX I THAT A TR IPARTITE AGREEMENT IS TO BE ENTERED INTO BETWEEN THE KODAK, HICAL MAGNETIC PVT. L TD. AND SUPPLIERS, WHO IS USING THE TOOLS/MOULDS AND THE HICAL MAGNETIC PVT. L TD. ENSURE THE SAFE CUSTODY, MAINTENANCE AND WORKING OF TOOLS. THE CLAUSE 2.2 READS AS UNDER:- 2.2 THE TRIPARTITE AGREEMENT IS TO BE ENTERED INTO BETWEEN KODAK, HICAL AND SUPPLIER WHO IS USING THE TOOLS/MOULDS AND HICAL EN SURE THE SAFE CUSTODY, MAINTENANCE AND WORKING OF THE TOOLS. 18. THE RECITAL OF THE TRIPARTITE AGREEMENT READS AS UNDER:- A) KODAKK HAS SUPPLIED CERTAIN TOOLS & MOULDS MORE PARTICULARLY DESCRIBED IN ANNEXURE A HERETO (HEREINAFTER EQUIPMENTS) TO THE SUPPLIER FOR CARRYING OUT JOB WORK FOR CAMERA AS PER THE REQUIRE MENTS OF THE KODAK. B) KODAK AND HICAL HAVE ENTERED INTO AN AGREEMENT W HEREBY HICAL WILL SUPPLY TO KODAK KB-10 CAMERAS AS PER THE SPECIFICAT IONS OF KODAK. C) HICAL HAS UNDERTAKEN TO SUPPLY TO KODAK KB10 CAM ERAS AS PER REQUIREMENTS OF KODAK. D) SUPPLIER HAS AGREED TO USE THE TOOLS AND MOULDS OWNED BY KODAK FOR THE PURPOSE OF SUPPLY OF CAMERA PARTS TO HICAL. 19. THUS AS PER THE ARRANGEMENT BETWEEN THE PARTIES , THE ASSESSEE SUPPLIED TOOL/MOULDS TO THE SUPPLIER FOR CARRYING OUT JOB WOR K FOR CAMERA PARTS AS PER REQUIREMENTS OF THE ASSESSEE. THESE CAMERA PARTS WE RE SUPPLIED TO THE HICAL MAGNETIC PVT. LTD. FOR ASSEMBLING OF CAMERA. IT IS C LEAR THAT THE JOB WORK FOR CAMERA PARTS USED AS A RAW MATERIAL FOR ASSEMBLING OF THE CAMERA BY HICAL MAGNETIC PVT. LTD. IS ARRANGED BY THE ASSESSEE UNDER T HE TRIPARTITE AGREEMENT. FURTHER THE ASSESSEE IS PROVIDING THE WORKING CAPIT AL FUND TO THE HICAL MAGNETIC PVT. LTD. FOR THE PURPOSE OF ALL COST INCLU DING LABOR AND RAW MATERIAL KODAK INDIA PVT. LTD. 13 | P A G E WHICH IS SUPPLIED UNDER THE TRIPARTITE AGREEMENT. THE REFORE, THE NOMENCLATURE OF THE AGREEMENT BECOMES IRRELEVANT WHEN THE INTENT ION OF THE PARTIES PRESENTS A DIFFERENT PICTURE AS PER THE VARIOUS TERM S AND CONDITIONS OF THE AGREEMENT. THE CIT(A) HAS ASSUMED A WRONG FACT BY RE CORDING THE TRIPARTITE AGREEMENT AS AN AGREEMENT FOR TOOLS AND MOULDS BUT IT WAS ACTUALLY AN AGREEMENT FOR JOB WORK OF CAMERA PARTS BY SUPPLIER FOR USE OF ASSEMBLING THE CAMERA BY HICAL MAGNETIC PVT. LTD. THEREFORE, IT WAS NOT AN AGREEMENT FOR TOOLS AND MOULDS BUT IS AN AGREEMENT FOR SUPPLY OF CAMERA PARTS BY VARIOUS SUPPLIERS TO HICAL MAGNETIC PVT. LTD. THE CAMERA PAR TS ARE MANUFACTURED AS PER THE TOOLS AND MOULDS PROVIDED BY THE ASSESSEE THUS THE RAW MATERIAL IS SUPPLIED TO THE HICAL MAGNETIC PVT. LTD. BY THE ASSE SSEE THROUGH THE SUPPLIERS UNDER THE TRIPARTITE AGREEMENT. THE ASSESSEE HAS PRO VIDED THE WORKING CAPITAL TO HICAL MAGNETIC PVT. LTD. FOR PURCHASE OF RAW MATE RIAL / CAMERA PARTS FROM SUPPLIERS AND ALSO FOR LABOR COST. THIS ARRANGEMENT SHOWS THAT THE RAW MATERIAL IS PROVIDED BY THE ASSESSEE TO HICAL MAGNETI C PVT. LTD. THROUGH THESE SUPPLIERS AND THE PAYMENT IS MADE BY PROVIDING WORKI NG CAPITAL BY THE ASSESSEE TO HICAL MAGNETIC PVT. LTD. WITHOUT ANY CH ARGE OF INTEREST. HICAL MAGNETIC PVT. LTD., IS DOING ONLY THE ASSEMBLING OF T HE CAMERAS AS PER THE SPECIFICATIONS PROVIDED BY THE ASSESSEE BY USING TH E RAW MATERIAL PROVIDED UNDER THE TRIPARTITE AGREEMENT. 20. THIS ARRANGEMENT UNDER THESE TWO AGREEMENTS IS N OTHING BUT A CONTRACT UNDER WHICH THE ACTIVITY OF HICAL MAGNETIC PVT. LTD. DO NOT HAVE FINANCIAL RISK AND WORKING CAPITAL RISK AS IT WAS ALL PROVIDED BY T HE ASSESSEE. EVEN THE PROCUREMENT OF THE RAW MATERIAL IS ALSO ARRANGED BY THE ASSESSEE AS PER THE TRIPARTITE AGREEMENT. THUS IT IS NOTHING BUT A JOB WORK CONTRACT UNDER THESE KODAK INDIA PVT. LTD. 14 | P A G E TWO AGREEMENTS. FURTHER THE ASSESSEE IS PAYING THE ENTIRE COST IN ADVANCE BEING WORKING CAPITAL AND COMPENSATION WITH THE MARG IN ON COST OF RAW MATERIAL AND LABOR AT THE RATE OF RS. 8.04 PER CAMER A TO HICAL WHICH IS NOTHING BUT THE JOB WORK CHARGES. THE PRICE ARRANGEMENT AS AGREED BETWEEN THE PARTIES CLEARLY SHOWS THAT IT IS A JOB WORK OF ASSE MBLING OF CAMERAS BY HICAL MAGNETIC PVT. LTD. THE HICAL MAGNETIC PVT. LTD. IN FA CT, RECEIVING ONLY THE LABOR CHARGES AND MARK UP OF RS. 8.04 PER CAMERA WHICH IS SUBJECTED TO TDS BEING JOB WORK CHARGES PAID BY ASSESSEE. THEREFORE, IT IS NOT THE ENTIRE PAYMENT TO THE HICAL MAGNETIC PVT. LTD. BUT ONLY THE LABOR CHAR GES OF RS. 20.84 AND MARGIN OF RS. 8.04 TOTAL AMOUNTING TO RS. 28.88 PER CAMERA TOWARDS THE ASSEMBLING JOB IS SUBJECTED TO TDS. ACCORDINGLY, WE SET ASIDE THE IM PUGNED ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THE ORDER OF ASSESSING OFFICE R TO THE EXTENT OF APPLICABILITY OF SECTION 194C ONLY ON THE PAYMENT O F RS. 28.88 PER CAMERA. THE DECISION RELIED UPON BY THE CIT(A) IN THE CASE OF CI T VS. GLENMARK PHARMACEUTICALS (SUPRA) IS NOT RELEVANT ON THE FACT S OF THIS ISSUE WHEN THE ARRANGEMENT IS FOUND TO BE WORK CONTRACT. 19. GROUND NO. 3 IS REGARDING SORT DEDUCTION OF TDS ON THE PAYMENT TO AGENT. 20. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COMPANY HAD PAID COMMISSION TO THE HANDLING AGENTS AND IT HAS NOT DEDUC TED TDS ON THE GROSS PAYMENTS TO PAYEE INSTEAD CLAIMED IT PAYS ADVANCE TO ITS AGENTS BUT DOES NOT DEDUCT TDS ON IT AS IT IS FOR REIMBURSEMENT OF FREIG HT CHARGES, DELIVERY ORDER CHARGES, POST HANDLING CHARGES ETC. THE ASSESSING OF FICER FURTHER NOTED FROM THE SAMPLE BILLS THAT IT INCLUDES TRANSPORTATION, CR ANE HIRING, ADMINISTRATION CHARGES, HANDLING CHARGES TO AIRPORT AUTHORITY OF IN DIA ETC., AND THE COMPOSITE BILL IS RAISED IN THE NAME OF THE ASSESSEE. THUS THE ASSESSING OFFICER WAS OF THE KODAK INDIA PVT. LTD. 15 | P A G E VIEW THAT INDIVIDUALLY EACH OF THESE PAYMENTS ATTRACT TDS U/S 194I, 194J, 194H AND 194C. THE ASSESSING OFFICER WORKED OUT THE SHOR T DEDUCTION OF TAX AT RS. 91,53,582/- APART FROM INTEREST U/S 201(1A) AT RS. 5,49,215/- 21. ON APPEAL, THE CIT(A) HAS HELD THAT NO TDS WAS REQUIRED TO BE DEDUCTED ON MERE REIMBURSEMENT OF EXPENSES. 22. BEFORE US, THE LD. DR HAS RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT WHEN THE PAYMENT IS OTHERWISE SUBJECT ED TO TDS THEN MAKING THE PAYMENT THROUGH THE AGENT WOULD NOT CHANGE THE TAX DEDUCTION LIABILITY OF THE ASSESSEE. 23. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATI VE OF THE ASSESSEE HAS SUBMITTED THAT THERE IS NO DISPUTE THAT THE PAYMENT IN QUESTION IS ONLY THE REIMBURSEMENT OF EXPENSES TO THE AGENTS WHICH WERE INCURRED ON ACCOUNT OF VARIOUS PAYMENT MADE TO THE PARTIES AND OTHER CHARGES . HE HAS RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. SIEMENS AKTIONGESELLSCHAFT (310 ITR 320) AS WELL AS THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF S.S. & CO. OCTROI CONTRACTORS VS. STATE OF PUNJAB (268 ITR 398). 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE PAID TH IS AMOUNT TO THE AGENT FOR MAKING THE PAYMENT TO THIRD PARTIES FOR VARIOUS SERV ICES AVAILED BY THE KODAK INDIA PVT. LTD. 16 | P A G E ASSESSEE. IT IS ALSO NOT DISPUTED THAT IF THE PAYME NT IS DIRECTLY MADE BY THE ASSESSEE TO THE THIRD PARTY IN RESPECT OF THE SERVI CES PROVIDED TO THE ASSESSEE, THE SAME ATTRACTS THE TDS UNDER THE PROVISIONS OF CH APTER XVII OF THE INCOME TAX ACT. THE ASSESSING OFFICER HAS RECORDED THAT THE PAYMENT WAS MADE IN RESPECT OF TRANSPORTATION CHARGES, CRANE HIRING CH ARGES, ADMINISTRATION CHARGES, HANDLING CHARGES TO THE AIRPORT AUTHORITY OF INDIA ETC. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT EACH OF THESE INDIVIDU AL PAYMENTS ATTRACTS THE TDS UNDER THE DIFFERENT PROVISIONS OF CHAPTER XVII. THEREFORE, IT IS PERTINENT TO NOTE THAT THE AGENT HAS MADE THE PAYMENT TO THE THIR D PARTY FOR AND ON BEHALF OF THE ASSESSEE, THEREFORE, IT MAKES NO DIFFERENCE I F THE PAYMENT IS DIRECTLY MADE BY THE ASSESSEE TO THE THIRD PARTY OR IT IS MAD E THROUGH THE AGENT OF THE ASSESSEE IF THE PAYMENT OTHERWISE ATTRACTS THE TDS AS PER PROVISIONS OF CHAPTER XVII OF INCOME TAX ACT. IT IS NOT THE REIMB URSEMENT OF COST OF AGENT FOR RENDERING SERVICES TO THE ASSESSEE BUT IT IS THE PAY MENT MADE TO THE THIRD PARTY THROUGH THE AGENT FOR THE SERVICES PROVIDED BY THE TH IRD PARTY TO THE ASSESSEE. ONCE THE PAYMENT IS MADE THROUGH THE AGENT TO THE T HIRD PARTY AGAINST THE SERVICES PROVIDED BY THE THIRD PARTY, THE ASSESSEE IS LIABLE TO DEDUCT TAX ON SUCH PAYMENT OR TO ENSURE THE TDS THROUGH THE AGENT. THE RE IS NO DENIAL OF THE FACT THAT THESE PAYMENTS WERE NOT SUBJECTED TO TDS EITHER BY THE ASSESSEE OR BY THE AGENT. FAILURE TO DEDUCT TAX FOR SUCH PAYMENT AT AN Y STAGE EITHER BY THE AGENT OR BY THE ASSESSEE WOULD ATTRACT THE PROVISIONS OF S ECTION 201(1) AND 201(1A). IF THIS MODUS OPERANDI IS ALLOWED THEN IN EACH AND EVERY PAYMENT WHICH OTHERWISE ATTRACTS THE TDS CAN BE GIVEN A COLOUR OF REIMBURSEMENT OF MAKING THE PAYMENT THROUGH INTERMEDIATORY AND CONSEQUENTLY CIRCUMVENT THE PROVISIONS OF TDS. THE REAL FACT IS THAT THE PAYMEN T IS MADE FOR AND ON BEHALF OF THE ASSESSEE BY THE AGENT AND, THEREFORE, THE SAME W OULD BE CONSIDERED AS PAYMENT MADE BY THE ASSESSEE TO THE THIRD PARTY FOR T HE PURPOSE OF TDS KODAK INDIA PVT. LTD. 17 | P A G E PROVISIONS UNDER CHAPTER XVII OF THE ACT. THE DECISIO N RELIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE IN CASE OF CIT VS. SIEMENS AKTIONGESELLSCHAFT (SUPRA) AS WELL AS S.S. & CO. OCTROI CONTRACTORS VS. STATE OF PUNJAB & ORS. (SUPRA) DO NOT APPLY TO THE FACTS OF THE PRESENT CASE WHEN I T IS NOT A REAL REIMBURSEMENT OF THE EXPENSES TO THE AGENT BUT IS A PAYMENT TO A THIRD PARTY THROUGH THE AGENT. ACCORDINGLY IN VIEW OF THE ABOVE DISCUSSION AND FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ORDER OF ASSESSING OFFICER ON THIS ISSUE. 25. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. ORDER PRONOUCNED IN THE OPEN COURT ON THIS 21 ST DAY OF JANUARY 2015. SD/- SD/- (R.C. SHARMA) (VIJAY PAL RAO) ( ACCOUNTANT MEMBER / YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; ) MUMBAI DATED 21- 01-2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI