TaxTMI 
TaxTMI 
2016 (5) TMI 1141
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....ur and warehouses at Bhiwandi, Ghaziabad and Zirakpur. Finished products are dispatched from the factories/warehouses to distributors and Consignment Agents based on orders/indents received from them. The assessee-company sells the formulation products to Distributors on Principal to Principal basis and to stockists through consignment agents. Collections are received from distributors, consignment agents and stockists in the assessee's bank accounts. In the course of survey proceedings under section 133A of the Act the Assessing Officer (AO) found that the assessee is selling its products by way of exports and through its distributiors, stockists and consignment agents at a fixed MRP for its product and that the assessee is accounting its sales after deducting the margin earned by the distributor/ stockist. The AO observed that while the assessee is paying commission to its consignment agents and deducting tax at source thereon at the rates applicable under section 194H of the Act, the assessee has given discounts/ schemes to the distributors/stockists and no tax is deducted at source thereon. In this regard, a statement on oath was recorded by the Department of the G.M. Finance o....
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....on under section 201(1A) of the Act. In these orders the AO also held that the assessee was required to deduct tax at source on Directors sitting fees as per the amendments to the provisions of section 194J(ba) w.e.f. 01.07.2012. 2.4 On appeal, the learned CIT(A)-14, Mumbai disposed off the assessee's appeals vide the impugned orders dated 11.07.2014 for A.Y. 2011-12 and order dated 14.07.2014 for A.Y. 2012-13, allowing the assessee partial relief. 3. Revenue is aggrieved by the orders of the learned CIT(A)-14, Mumbai dated 11.07.2014 for A.Y. 2011-12 and dated 14.07.2014 for A.Y. 2012-13 and has raised identical grounds for both these years. We would therefore proceed to first dispose off the appeal for A.Y. 2011-12. Revenue's appeal in ITA No. 5991/Mum/2014 for A.Y. 2011-12 4. The grounds of appeal raised by the Revenue are as under: - "1. Grounds of Appeal: (i). On the facts and circumstances of the case and in law, the Id. CIT (A) has erred in holding that the relationship between the assessee and distributors is in the nature of principal to principal and not that of principal to agent and held that the assessee company was not liable to deduct TDS u/s. 194H of the IT.....
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....le, directly or indirectly by a person acting on behalf of another person for services rendered in the course of buying or selling of goods within the meaning of section 194H of the Act. The learned D.R. was heard in support of the grounds raised. 5.2 At the outset, the learned A.R. for the assessee submitted that the issue in question raised by the Revenue (supra) has been considered and adjudicated in favour of the assessee by a Coordinate Bench of this Tribunal in the assessee's own case for A.Y. 2009-10 and 2010-11 in ITA No. 4592 & 4593/Mum/2014 dated 29.01.2014. 5.3.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncement cited (supra). We find that the issue of whether or not the assesseecompany is liable to deduct tax at source (TDS) under section 194H of the Act in respect of payments in the form of discounts/rebates/incentives on MRP given by the assessee to the distributors in the course of selling its goods was considered and held in favour of the assessee by the Coordinate Bench of this Tribunal in the assessee's own case for assessment years 2009-10 and 2010-11 in ITA Nos. 5492 & 5493/Mum....
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....t decisive to conclude that the property in the goods with all risks and rewards have not passed to the distributor on sale of products by the assessee company to the distributor at the time of delivery by the carrier to the distributor as per stipulated terms of distribution agreement. We have also observed that the assessee company is raising sale invoice's on the distributor M/s Rudra Pharma Distributors Limited which are placed on the paper book filed by the assessee company at page 35 while the ledger account showing invoices raised and payments received from distributor M/s Rudra Pharma Distributors Limited by the assessee company is also placed in the paper book filed by the assessee company at page 36 to 51. We have also observed that the said distributor M/s Rudra Pharma Distributors Limited is registered with VAT authorities and is raising its invoices (including VAT) to their customers , whereby all the above facts clearly reflects that the distributors is buying the products from the assessee company and then selling the same in its own right with all risks and rewards of ownership got vested in the said distributors on the delivery of goods by carrier to the said distr....
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.... the material on record, including the judicial pronouncement cited (supra). We find that the issue of whether or not the assesseecompany is liable to deduct tax at source (TDS) under section 194J(ba) of the Act in respect of sitting fees paid to Directors as per the amendment thereto w.e.f. 01.07.2012 has been considered and held in favour of the assessee by the Coordinate Bench of this Tribunal in the assessee's own case for assessment years 2009-10 and 2010-11 in ITA No. 5492 & 5493/Mum/2014 dated 29.01.2016, holding as under at para 13 thereof: - "13. We have heard the rival parties and perused the material on record and we are in respectful agreement with the decision of the Pune Tribunal in the case of Bharat Forge Limited (supra) that no tax is to be deducted at source on Director sitting fee payable to Director u/s 194J of the Act prior to the amendment w.e.f. 01-07-2012 in Section 194J by insertion of sub-section (ba) to Section 194J(1) of the Act . The insertion of sub-section (ba) to Section 194J of the Act has clearly stipulated that tax is to be deducted at source on any remuneration or fees or commission by whatever name called to a director of a company, other than ....