SIKAR & JHUNJHNU ZILA DUGHDH UTPADAK SAHAKARI SANGH LTD., Jaipur V. ITO, Jaipur

ITA 838/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5262 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NOS. 838 TO 840/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2011-12 TO 2013-14 SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., N.H.-11, P.O.- PALSANA, SIKAR. CUKE VS. INCOME TAX OFFICER (TDS)-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO. TAN: JPRSO 5808 F VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VK;DJ VIHY LA- @ ITA NOS. 553 TO 555/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2011-12 TO 2013-14 INCOME TAX OFFICER (TDS)-3, JAIPUR. CUKE VS. SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., N.H.-11, V&P- PALSANA, DISTRICT-SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO. TAN: JPRSO 5808 F VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 15/04/2016 MN~?KKSK.KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 16/05/2016 ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 2 VKNS'K @ ORDER PER: BENCH. THESE ARE CROSS APPEALS BEING ITA NOS. 838 TO 840/J P/2014 FILED BY THE ASSESSEE AND ITA NOS. 853 TO 855/JP/2014 FIL ED BY THE REVENUE ARISE AGAINST THE ORDER DATED 13/10/2014 OF THE LD CIT(A)-III, JAIPUR FOR A.Y. 2011-12 TO 2013-14. THE EFFECTIVE GROUNDS OF T HE ASSESSEES APPEAL FOR A.Y. 2011-12 ARE AS UNDER:- 1 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTIONS OF THE AO IN HOLDING THAT PAYMENT OF MILK PURCHASE PRI CE DIFFERENCE TO THE MILK SOCIETIES (DCS AND PDCS) IS A PAYMENT OF COMMISSION/BROKERAGE LIABLE FOR DEDUCTIO N OF TAX AT SOURCE U/S 194H AND THEREBY THE ASSESSEE IS IN DEFAULT U/S 201(1) AND RAISING A DEMAND OF RS. 13,22,204/- FOR NON DEDUCTION OF TAX AT SOURCE U/S 194H. 1.1 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTIONS OF THE A.O. IN LEVYING INTEREST U/S 201(1A) ON THE ALL EGED NON DEDUCTION OF TAX AT SOURCE U/S 194H. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DEMAND O F RS. 400/- U/S 206C(6A) AND RS. 11/- U/S 206(7) ON ACCOUNT OF NON COLLECTION OF TAX AT SOURCE ON SALE OF SCRAP. IN OTHER APPEALS OF THE ASSESSEE FOR A.Y. 2012-13 A ND 2013-14, SIMILAR IDENTICAL GROUNDS HAVE BEEN TAKEN. ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 3 GROUNDS OF REVENUES APPEAL WHETHER ON FACTS AND IN LAW, LD. CIT(A) ERRED IN HOLDING THAT THE MARGIN OF DISTRIBUTION IN THE PAYM ENTS MADE BY THE ASSESSEE TO ITS DISTRIBUTORS IS NOT COMMISSION LIABLE FOR DEDUCTION U/S 194H OF THE INCOME-TAX ACT, 1961? WHETHER ON THE FACTS AND IN LAW, LD CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO PAY INTE REST U/S 201(1A) OF THE INCOME TAX ACT, 1961 AS THERE WAS NO TAX LIABILITY ON THE INCOME OF THE DEDUCTEE. IN OTHER APPEALS OF THE REVENUE FOR A.Y. 2012-13 AN D 2013-14, SIMILAR IDENTICAL GROUNDS HAVE BEEN TAKEN. 2. ALL THE CROSS APPEALS FILED BY THE ASSESSEES AND REVENUE HAVE BEEN HEARD TOGETHER AND ISSUE IN ALL THE APPEALS OF BOTH THE PARTIES ARE IDENTICAL, THEREFORE, FOR SAKE FOR CONVENIENCE, COM MON ORDER IS PASSED IN BOTH THE CASES OF ASSESSEE AS WELL AS REVENUE. 3. GROUND NO. 1 OF THE ASSESSEES APPEAL IN ALL THE YEARS ARE AGAINST CONFIRMING THE ACTION OF THE LD ASSESSING OFFICER H OLDING THAT PAYMENT OF MILK PURCHASE PRICE DIFFERENCE TO MILK SOCIETY IS P AYMENT OF COMMISSION/BROKERAGE AND LIABLE TO DEDUCTION OF TAX AT SOURCE U/S 194H OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE IS A COOPERATIVE SOCIETY AT DISTRICT LEVEL, WHICH COLLECT S MILK FROM VILLAGE LEVEL PRIMARY SOCIETIES, WHICH IS ENGAGED IN THE PROCESSIN G OF MILK AND ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 4 MARKETING MILK AND MILK PRODUCTS TO THEIR MEMBER UN IONS. IN THIS CASE A SURVEY WAS CARRIED OUT ON 12/2/2013 FOR THE PURPOSE OF TDS/TCS AT THE OFFICE PREMISES OF SIKAR & JHUNJHUNU DUGDH UTPADAK SAHAKARI SANGH LTD.. THE LD ASSESSING OFFICER NOTICED THAT THE ASSE SSEE HAD MADE PAYMENT OF RS. 1,3222,045/- ON ACCOUNT OF MILK PURC HASE DIFFERENCE IN A.Y. 2011-12, RS. 1,77,66,242/- IN A.Y. 2012-13 AND RS. 1,13,55,795/- IN A.Y. 2013-14. HOWEVER, NO TDS HAS BEEN DEDUCTED BY TH E ASSESSEE. THE ASSESSEE WAS GIVEN REASONABLE OPPORTUNITY OF BEING H EARD ON THIS ISSUE, WHICH WAS REPLIED BY THE ASSESSEE VIDE LETTER DATED 1 3/3/2013, WHICH HAS BEEN REPRODUCED BY THE ASSESSING OFFICER ON PAGE NO . 12 OF THE IMPUGNED ORDER. IT IS CONTENDED THAT THIS ISSUE HAS BEEN EXAMINED IN DETAIL BY HIS PREDECESSOR, IN VIEW OF THAT, THIS IS THE PAYMENT TO PRINCIPAL TO PRINCIPAL HENCE NO ELEMENT OF COMMISSION. THE LD ASSESSING OFFICER CONSIDERED THE ORDER OF THE ASSESSING OFFICER IN AS SESSEES CASE FOR F.Y. 2009-10 AND CIT(A) ORDER FOR F.Y. 2008-09 ORDER DAT ED 28/1/2013 WHEREIN IT HAS BEEN HELD THAT PAYMENT MADE BY THE DE DUCTOR TO MILK SOCIETIES (DCS) AND (PDCS) WAS IN NATURE OF COMMISSI ON/BROKERAGE, WHICH ATTRACTED THE PROVISIONS OF SECTION 194H OF TH E ACT. HE AGAIN CONSIDERED THE DEFINITION OF COMMISSION OR BROKERAG E PROVIDED U/S 194H ON PAGE NO. 3. AGAIN OPPORTUNITY WAS GIVEN TO THE AS SESSEE, WHICH WAS ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 5 AVAILED BY THE ASSESSEE. THE ASSESSEES REPLY HAS BE EN REPRODUCED ON PAGE NO. 14 AND 15. AFTER CONSIDERING THE ASSESSEE S REPLY, THE LD ASSESSING OFFICER HELD THAT THE ASSESSEE IS IN DEFA ULT WITHIN THE MEANING OF SECTION 200(1) READ WITH SECTION 200(1A) OF THE A CT FOR NON-DEDUCTION OF TAX OF RS. 17,02,918/-. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD DIS MISSED THE APPEAL ON THIS GROUND BY OBSERVING THAT THE ASSESSEE HAD MADE PAYMENT ON ACCOUNT OF PURCHASE OF MILK TO DIFFERENT MILK SOCIE TIES AND THESE MILK SOCIETIES SUBSEQUENTLY MADE PAYMENTS TO THE CATTLE OWNERS FROM WHOM ORIGINALLY THE MILK WAS PURCHASED AND WHILE MAKING PA YMENT TO SUCH CATTLE OWNERS THESE SOCIETIES RETAINED A FIX PERCENT AGE OF AMOUNT FROM THE TOTAL AMOUNT RECEIVED FROM THE ASSESSEE AS THEI R COMMISSION OR BROKERAGE. THIS ISSUE HAS BEEN CONSIDERED BY THE LD CIT(A) IN A.Y. 2008- 09 VIDE ORDER DATED 28/1/2013 WHEREIN IT HAS BEEN HE LD THAT THIS IS A COMMISSION/BROKERAGE AND IS LIABLE TO DEDUCT TDS. A CCORDINGLY, HE DISMISSED THE ASSESSEES APPEAL. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE HONBLE ITAT VIDE ORDER DATED 21/07/2015 HAS ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 6 DECIDED THE ASSESSEES CASE FOR A.Y. 2008-09 AND IN ITA NO. 382/JP/2013 ORDER DATED 21/07/2015 BY HOLDING THAT THE PAYMENT IS NOT LIABLE FOR DEDUCTION OF TAX U/S 194H OF THE ACT. INASMUCH AS T HE ASSESSEE SOCIETY DOES NOT PURCHASE MILK FROM THE CATTLE OWNERS AS MIS TAKENLY HELD BY THE ASSESSING OFFICER AND THUS THE LIABILITY HAS BEEN F ASTENED UNDER MISCONCEPTION OF FACTS. AGAIN IN A.Y. 2011-12, THE HONBLE ITAT VIDE ORDER DATED 04/3/2016 PASSED IN ITA NO. 87/JP/2015 AND 96/JP/2015 DELETED THE SIMILAR DISALLOWANCES U/S 40(A)(IA) OF T HE ACT BY HOLDING THAT SECTION 194H IS NOT APPLICABLE. HE HAS FURTHER ARGU ED THAT THE ASSESSEE PURCHASED MILK FROM THE VARIOUS PRIMARY SOCIETIES, WHO RAISES BILLS FOR THE MILK AND FOR THEIR MARGIN, CLAIMED MILK PRICE DIFFE RENCE. THESE PRIMARY COOPERATIVE SOCIETIES ARE CONSTITUTED BY THE MILK P URCHASERS FOR THE PURPOSES OF COLLECTION AND DISPOSAL OF MILK PRODUCE D BY THEM. THE ASSESSEE SOCIETY PURCHASED MILK DIRECTLY FROM THE P RIMARY SOCIETY ON PRINCIPAL TO PRINCIPAL BASIS. THEREFORE, PAYMENTS MA DE TO PRIMARY COOPERATIVE SOCIETIES ALONGWITH FIXED MARGIN CALLED MILK PRICE DIFFERENCE IS ONLY A PAYMENT TOWARDS PURCHASE OF MILK AND NOT A P AYMENT OF ANY COMMISSION OR BROKERAGE, WHICH INCLUDES COST OF MILK AND SERVICES PROVIDED DIRECTLY TO THE ASSESSEE BUT COMMISSION IS PAID SEPARATELY TO THE PERSON, WHO IS ACTING ON BEHALF OF THE OWNER OF GOODS OR PROVIDED OF ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 7 SERVICES. HE ALSO SUBMITTED THAT THE ASSESSEES CAS E IS NOT CAME U/S 194H OF THE ACT. HE FURTHER RELIED ON THE FOLLOWING CASE LAWS:- (I) BHOPAL SUGAR INDUSTRIES LTD. VS SALES TAX OFFIC ER, BHOPAL 1977 SCC (3) 147. (II) ALLAHABAD BANK VS. ITO (2015) 152 ITD 383 (AGR A) (TRIB) (III) ICICI BANK LTD. VS DCIT 90 DTR 401 (LUCKNOW) (TR IB). (IV) THOMAS MUTHOOT VS. DCIT 80 DTR 33 (COCH.) (TRIB) THEREFORE, HE PRAYED TO DELETE THE ADDITION CONFIRME D BY THE LD CIT(A) IN ALL THE YEARS. 6. AT THE OUTSET THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LD CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE CO ORDINATE BENCH HAS CONSIDERED THE IDENTICAL ISSUE IN ITA NO. 277/JP/20 13, ITA NO. 382/JP/2013, ITA NO. 87/JP/2015 AND ITA NO. 96/JP/2 015 FOR A.Y. 2008- 09 AND 2011-12, WHICH IS SQUARELY APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEARS UNDER CONSI DERATION. THEREFORE, WE DELETE THE ADDITION CONFIRMED BY THE LD CIT(A) IN ALL THE YEARS. ACCORDINGLY, THE INTEREST IS ALSO NOT LIABLE TO BE CHARGED ON IT. AS THERE IS NO DEFAULT U/S 194H OF THE ACT AND NO DISALLOWANCE C AN BE MADE U/S 40(A)(IA) OF THE ACT. ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 8 8. GROUND NO. 2 OF THE ASSESSEES APPEAL IS AGAINST CONFIRMING THE PAYMENT OF RS. 400/- U/S 206C(6A) AND RS. 144/- U/S 206C(7) OF THE ACT ON ACCOUNT OF NON COLLECTION OF TAX AT SOURCE ON SA LE OF SCRAP IN A.Y. 2011-12, RS. 2300/- U/S 206C(6A) AND RS. 643/- U/S 206C(7) OF THE ACT IN A.Y. 2012-13 AND RS. 2340/- U/S 206C(6A) AND RS. 394/- U/S 206C(7) OF THE ACT IN A.Y. 2013-14. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD MADE SALES OF SCRAP BUT NO TCS HAS BEEN DEDUCTED BY THE ASSESSEE. THE LD ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING ON THIS ISSUE, WHICH HAS BEEN CONSIDERED BY CONSIDER ING THE ASSESSEES REPLY AND HELD THAT THE ASSESSEE HAS NOT DEDUCTED TD S ON SALE OF SCRAP. THE LD CIT(A) ALSO CONFIRMED THE ORDER OF THE LD ASS ESSING OFFICER BY OBSERVING THAT THE ASSESSEE IS LIABLE TO COLLECT TDS ON THE SALE OF SCRAP U/S 206 OF THE ACT. HE CONSIDERED THE CBDT CIRCULAR NO. F.NO. 275/86/2011-IT(B) DATED 18/5/2012 AND DISMISSED THE ASSESSEES APPEAL. 9. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT IN A.Y. 2007-08 TO 2010-11, THIS ISSUE HAS BEEN CONSIDERED BY THE LD. ASSESSING OFFICER AND LD CIT( A)AND HELD THAT THE ASSESSEE IS LIABLE FOR TCS U/S 206 OF THE ACT. HOWEVE R, THE HONBLE ITAT VIDE ORDER DATED 04/3/2016 IN ITA NO. 82 TO 86/JP/2 015 HAD DELETED THE ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 9 DISALLOWANCE BY HOLDING THAT THE ITEM SOLD BY THE AS SESSEE IS SCRAP LIKE TIN, POLYTHIN, IRON SCRAP, PLASTIC DRUM ETC. IS NOT THE SCRAP GENERATED FROM MANUFACTURING PROCESS, IS NOT LIABLE TO TCS U/S 206C OF THE ACT. THE CIRCULAR REFERRED BY THE LD CIT(A) IS FOR TRADING OF SCRAP, THEREFORE, HE PRAYED TO DELETE THE ADDITION. 10. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORT ED THE ORDER OF THE LD CIT(A). 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE CO ORDINATE BENCH HAS CONSIDERED THIS ISSUE IN EARLIER YEARS AND HELD THA T THIS SCRAP HAS NOT BEEN GENERATED DURING THE MANUFACTURING PROCESS AND CIRCULAR NOTED BY THE LD CIT(A) IS ALSO NOT APPLICABLE ON THE GIVEN FA CTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, WE DELETE THE ADDITION MAD E BY THE LD ASSESSING OFFICER AND CONFIRMED BY THE LD CIT(A). NOW WE ARE DECIDING THE REVENUES APPEAL 12. THE REVENUE IS AGAINST ALLOWING THE APPEAL BY THE LD CIT(A) BY HOLDING THAT THE MARGIN OF DISTRIBUTION IN THE PAYM ENTS MADE BY THE ASSESSEE TO ITS DISTRIBUTOR IS NOT COMMISSION LIABL E FOR DEDUCTION U/S 194H OF THE ACT IN ALL THE YEARS. THE LD ASSESSING OFFICE R HAS OBSERVED THAT THE ASSESSEE HAD PAID COMMISSION TO THE DISTRIBUTORS AT RS. 1,35,28,711/- IN ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 10 A.Y. 2011-12, RS. 1,69,25,223/- IN A.Y. 2012-13 AND RS. 1,56,49,706/- IN A.Y. 2013-14. LD ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE SOLD MILK THROUGH THE RETAILER AND PAID THE COMMISS ION TO THE DISTRIBUTOR AS THE ASSESSEE TRANSPORTED THE MILK FROM PLANT TO RETAILER AND OVERCOMING THE PROBLEMS OF TAMPERING, PILFERAGE AND LOSS OF WEIGHT DURING TRANSPORTATION. THE MARGIN PROVIDED TO THE DI STRIBUTOR AGENTS IS NOTHING BUT THE COMMISSION. FURTHER THE CBDT VIDE C IRCULAR NO. 619 DATED 04/12/1991 HAS CLARIFIED THAT RETENTION OF CO MMISSION BY AGENT AMOUNTS TO CONSTRUCTING PAYMENT OF THE SAME TO HIM BY THE PRINCIPAL AND DEDUCTION OF TAX IS REQUIRED TO BE DONE FROM THE AM OUNT OF COMMISSION. AS PER ASSESSEE, THIS WAS THE SALE ON THE BASIS OF P RINCIPLE TO PRINCIPLE AND THE ASSESSEE IS NOT LIABLE FOR ANY TRANSIT LOSS , PILFERAGE LOSS, WEIGHT LOSS ETC. COST OF DISTRIBUTION IS BORNE BY THE DIST RIBUTOR WHICH IS NOT BEING REIMBURSED BY THE ASSESSEE. THE DISTRIBUTOR IS TO BE MADE PAYMENT IN ADVANCE. THERE IS NO CHANCE OF BAD DEBT BUT THE LD A SSESSING OFFICER HELD THAT THE OWNERSHIP OF GOODS HAS NOT BEEN TRANSFERRED AS THE ASSESSEE IS INVOLVED WITH THE OPERATION OF THE DISTRIBUTOR. COST OF DISTRIBUTION IS DECIDED AT TAKING INTO CONSIDERATION OF VARIOUS COS TS ON ACCOUNT OF TRANSPORTATION AND PERSONNEL TO THE DISTRIBUTOR. THE REAFTER, THE LD ASSESSING OFFICER CONSIDERED THE HON'BLE SUPREME CO URT DECISION IN THE ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 11 CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. VS. C IT 82 ITR 363 ON BOOKS OF ACCOUNT. THE CASE LAW REFERRED BY THE REVEN UE ARE ALSO NOT SQUARELY APPLICABLE. HE RELIED ON THE FOLLOWING CASE S:- (I) DELHI MILK SCHEME VS. CIT (2008) 173 TAXMAN 54/ 301 ITR 373 (DELHI). (II) HINDUSTAN COCA COLA BEVERAGES (P) LTD. VS. ITO (ITAT JP) 97 ITD 105. (III) ACIT VS BHARTI CELLULAR LTD. (CAL) 61 DTR 225. (IV) VODAFONE ESSAR CELLULAR LTD. VS. ACIT (KER) 332 ITR 255. (V) CIT VS IDEA CELLULAR LTD. (DEL) 325 ITR 148 (VI) ITO VS VODAFONE ESSAR CELLULAR LTD. (ITAT CHENNA I) 141 TTJ 461. (VII) CIT VS SINGAPORE AIRLINES LTD. (DEL) 319 ITR 29 (VIII) CIT VS DIRECTOR, PRASAR BHARTI (KER) 325 ITR 2 05 (IX) ACIT VS EDROOS SYED MOHAMMED ZAKIR (ITAT MUMBAI ) 47 SOT 199. THE ALTERNATE ARGUMENT ALSO NOT FOUND CONVINCING. THE RECIPIENT OF DISTRIBUTOR HAD SHOWN THESE ALLEGED COMMISSION AS I NCOME AND RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS. CIT 293 ITR 226 (SC) AND OTH ER CASES OF THE VARIOUS HONBLE HIGH COURTS. THE ASSESSEE HAS NOT B EEN ABLE TO PROVE THAT THE RECIPIENT HAS INCLUDED THIS COMMISSION AS INCOME IN THEIR RESPECTIVE RETURNS, WHICH IS ALSO NOT FOUND. ACCORDI NGLY, HE CREATED DEMAND U/S 201(1) AND 201(1A) OF THE ACT AT RS. 17, 68,165 IN A.Y. ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 12 2011-12, RS. 20,97,029/- IN A.Y. 2012-12 AND RS. 17 ,60,476/- IN A.Y. 2013-14. 13. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALL OWED THE APPEAL BY OBSERVING THAT THERE WAS AN AGREEMENT BETWEEN THE ASS ESSEE AND THE DISTRIBUTORS. THESE DISTRIBUTORS, SUBSEQUENTLY SUPPL IED MILK THROUGH VARIOUS RETAILERS AND WHILE MAKING SUCH SUPPLY TO TH E RETAILERS THE DISTRIBUTORS ADD A SPECIFIC MARGIN AMOUNT TO BE RET AINED BY THE DISTRIBUTORS, WHICH IS AS PER ASSESSING OFFICER IS A COMMISSION AND LIABLE TO DEDUCT TDS. THE HONBLE ITAT IN THE CASE OF ACIT (TDS ) VS JAIPUR ZILA DUGDH UTPADAK SAHAKARI SANGH LTD. IN ITA NO. 203 & 204/JP/2011 FOR A.Y. 2007-08 AND 2008-09 ORDER DATED 02/9/2011 AND DECISION IN THE CASE OF AJMER ZILA DUGDH UTPADAK SANGH LTD. 30 DTR 4 18 HAS HELD THAT SUPPLY OF MILL AND MILL PRODUCT BY THE ASSESSEE TO THE DISTRIBUTOR WAS A SALE AGREEMENT AND ON PRINCIPAL TO PRINCIPAL BASIS AND THE ASSESSEE DEDUCTOR WAS NOT LIABLE FOR TAX TO BE DEDUCTED AT SO URCE U/S 194H OF THE ACT. HE HAS REPRODUCED THE FINDING OF BOTH THE CASE S ON PAGE NOS. 33, 34 AND 35 OF THE APPEAL ORDER AND BY FOLLOWING THE DECI SION OF THE HONBLE ITAT, HE DELETED THE ADDITION. ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 13 14. NOW THE REVENUE IS IN APPEALS BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFF ICER AND AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS REITERATED TH E ARGUMENTS MADE BEFORE THE LD CIT(A) AND FURTHER ARGUED THAT THIS IS SUE IS COVERED BY THE DECISION OF HONBLE ITAT IN ASSESSEES OWN CASE IN I TA NO. 104 TO 108/JP/2015 FOR A.Y. 06-07 TO 10-11 ORDER DATED 04. 03.2016 WHEREIN IT WAS HELD THAT IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE CO-ORDINATE BENCH IN VARIOUS CASES. THE ASSESSEES TRANSACTION WI TH DISTRIBUTOR IS SALE. THE RISK AND REWARD IS WITH THE DISTRIBUTOR. THE TRANSA CTION IS PRINCIPAL TO PRINCIPAL BASIS. THE DISTRIBUTOR IS NOT THE AGENT OF THE ASSESSEE. FROM THE SIDE OF ASSESSEE, NO AMOUNT HAS BEEN PAID IN FORM O F COMMISSION OR BROKERAGE AND THE CASE LAWS REFERRED BY THE ASSESSEE ARE SQUARELY APPLICABLE. FURTHER, THE SUBMISSION GIVEN BEFORE TH E LD. CIT(A) AND FINDINGS OF CIT(A) ARE RELIED ON. HONBLE ITAT, JAIPU R BENCH IN CASE OF AJMER ZILA DUGDH UTPADAK SANGH LIMITED V. ITO 30 DTR 418 AND ACIT (TDS) V. M/S JAIPUR ZILA DUGADH UTPADAK SAHAKARI SAN GH LIMITED ITA NO. 203 & 204/JP/2011 ORDER DATED 2-09-2011 HAS HELD THAT SUPPLY OF MILK AND MILK PRODUCTS BY ASSESSEE TO THE DISTRIBUTORS WA S A SALE AGREEMENT ON PRINCIPAL TO PRINCIPAL BASIS NOT LIABLE FOR DEDU CTION OF TAX AT SOURCE U/S ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 14 194H OF THE IT ACT, 1961. IN VIEW OF ABOVE, THE GROUN DS OF THE DEPARTMENT BE DISMISSED. 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE CO ORDINATE BENCH HAS DECIDED THIS ISSUE ON IDENTICAL FACTS IN FAVOUR OF THE ASSESSEE AND HELD THAT THE AGREEMENT BETWEEN THE ASSESSEE AND DISTRIBU TORS IS AN AGREEMENT FOR SALE AND PRINCIPAL TO PRINCIPAL BASIS AND NOT LIABLE TO DEDUCT TDS U/S 194H OF THE ACT. INTEREST U/S 201A I S ALSO NOT CHARGEABLE AS WE HELD THAT NO TDS IS LIABLE TO BE DEDUCTED. ACCO RDINGLY, WE UPHOLD THE ORDER OF THE LD CIT(A). 16. IN THE RESULT, ALL THE ASSESSEES APPEALS ARE A LLOWED AND ALL THE REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2016. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 16 TH MAY, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHAKARI SANGH LTD., SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, (TDS)-3, JAIPUR. ITA 838 TO 840/JP/2014 & 853 TO 855/JP/2014_ SIKAR & JHUNJHUNU ZILA DUGDH UTPADAK SAHKARI SAMITI VS ITO (TDS) 15 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NOS. 838 TO 840/JP/2014, 853 TO 855/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR