2017 (3) TMI 258

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....called as 'the Act') and deletion of consequent penalty levied u/s 271C of the Act, for failure to deduct tax at source. Though, the facts are identical in both appeals, the issues are different, therefore, these appeals are disposed off separately by way of a common order for the sake of convenience. ITA No.299/Vizag/2016: 2. The brief facts of the case are that the assessee company M/s. National Mineral Development Corporation Limited (NMDC) is a Public Sector undertaking engaged in the business of mineral exploration and sale of iron ore. In this case, the assessment was completed u/s 143(3) r.w.s. 147 of the Act for the assessment year 2008-09, wherein the A.O. has disallowed commission payment u/s 40(a)(ia) of the Act, for n....

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....the assessment years 2008-09 & 2009-10 in ITA No.292 & 293/H/2013, deleted additions made by the A.O. towards tax and interest u/s 201(1) & 201(1A) of the Act. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 4. The Ld. D.R. submitted that the Ld. CIT(A) erred in holding that the assessee company is not liable to make TDS u/s 194H of the Act, on the commission payment to M/s. MMTC. The Ld. CIT(A) failed to appreciate the fact that the transaction between the assessee company and MMTC was on principal to agent basis. The Ld. D.R. referring to the provisions of section 182 of the Indian Contract Act, 1872 submitted that an agent is a person employed to do any act for another, or to represent another in dealing with third pe....

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....mmission payments. The Ld. A.R. further submitted that the ITAT, Hyderabad 'B' Bench in assessee's own case for the assessment years 2008-09 & 2009-10 in ITA No.292/H/2013 and 293/H/2013 has considered the issue of disallowance of commission payment to M/s. MMTC u/s 40(a)(ia) of the Act and after following the decision of ITAT, Visakhapatnam in assessee's own case has held that the transaction between the assessee and MMTC was on principal to principal basis and hence, there can be no commission payment to MMTC, as such, the question of sustaining the assessing officer in estimating commission and disallowing the same u/s 40(a)(ia) of the Act does not arise. 6. We have heard both the parties, perused the materials available on record and g....

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....the assessee herein is not entitled to export the iron ore with Fe content of 64% and above. Since the assessee is disentitled to export the goods, it cannot be possible to say that the goods were exported by MMTC on behalf of the assessee on a principal to agent basis. As contended by the assessee, it can only be held that the MMTC has exported the goods on its own and not on behalf of the assessee herein. By virtue of the Government regulations, both the companies had to reach an agreement with regard to the modalities of the incurring expenses and payment and in our opinion, the said modalities of payment are not the deciding factor to determine the nature of transaction. In view of the foregoing, we set aside the orders of the Ld CIT(A)....