TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1304
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....f the case in holding that the assessee should not to be treated as assessee in default for non deduction of tax at source under section 194J on the ground of out of pocket expenses or auditors of Rs.2,17,114/-. 2. The Ld. CIT(A) has erred in law as well as on facts of the case in holding that tax is not required to be deducted at source u/s.194H of the I. T. Act on commission payments made to Sahayak. 3. The Ld. CIT(A) has erred in law as well as on facts of the case in holding that the assessee should not to be treated as assessee in default for non deduction of tax at source under section 194J of the I.T. Act, on short deduction of tax on payment of commissioner charges paid to dairies. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have decided the issue under reference, in the light of evidence obtained by him during the appellate proceedings after following the due procedure of law." 3. Briefly stated, facts are that the appellant is a company incorporated as a producer company which is engaged in the business of pooling & purchasing milk primarily from its members & processing milk and milk products through third party processors. It....
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....commission payments made to Sahayak. Ld. AO has discussed the matter on Page No.12, Para 4(ii) and ld. CIT(A) has discussed on Page No.19, Para 6.3. In this regard, ld AR stated that assessee company is established under Part IX-A of the companies Act for procuring milk from its members. Accordingly, assessee has established Milk Procurement Points at every village for pooling of milk from its member producer and assessee has engaged persons termed as Sahayak at these Milk Procurement Point to collect the milk. The Sahayak collects milk from the members, feeds the same in testing machines for determining fat & SNF content of the Milk. He stores the milk till the time the transporters appointed by assessee transport the same to the bulk chilling centre. Milk collection and payment system at Milk Procurement Point is entirely IT enable and the Sahayak does not maintain any records of individual farmers and quality of milk procured for the assessee. The agreement with the Sahayak is on principal to principal basis. Same is part of Paper Book at Page No.146 and it is mentioned therein "this agreement has been entered into on principal to principal basis and nothing contained in this ag....
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....airies to the assessee. The dairies are not assigned any exclusive work relating to quality check but are assigned work relating to conversion/processing of milk and milk products, wherein one of the requirements is to ensure quality parameters. The main and basic nature of transaction viz. conversion/processing of mild on job work basis does not lose its true characteristic. Similar issue was arisen for Financial Year 2014- 15. Ld. CIT(A) had given relief to the assessee by these issues as follows: * "CIT(A) held that in view of the facts and nature of transaction payment is contractual in nature and appellant is justified in applying provisions of section 194C of the I.T. Act and cannot be considered as an assessee in default. * CIT(A) held that dairies are not assigned any exclusive work relating to quality check but they are assigned work relating to conversion/processing of milk into packed milk and milk products where they are also required to ensure certain quality parameters and therefore the main and basic nature of transaction viz. conversion/processing of milk on job work basis does not lose its true characteristic of works contract. In support of its contention ass....
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..../- u/s.40(a)(ia) even though the provisions of section 40(a)(ia) does not provide so. It is submitted it be so held now." 17. In ITA No.161/Rjt/2017, we have already decided this ground in favour of the assessee and against the department. Therefore, we hold that AO should have not disallowed the proportionate expenses of Rs. 1,95,59,757/- u/s.40(a)(ia). Therefore, we set aside this matter to the file of the AO to calculate the proportionate expenses and thereafter give effect to the appellant. In the result, this Cross Objection is allowed. 18. Now we come to ITA No.60/Rjt/2016 for Asst. Year 2015-16. In this case, following grounds has taken: "1. The Ld. CIT(A) has erred in law as well as facts of the case in holding that the assessee should not to be treated as assessee in default for non deduction of tax at source under section 194J on the ground of out of pocket expenses of auditors of Rs.2,48,069/-. 2. The Ld. CIT(A) has erred in law as well as facts of the case in holding that tax is not required to be deducted at source u/s.194H of the I.T. Act on commission payments made to Sahayak. 3. The Ld. CIT(A) has erred in law as well as facts of the case in holding that ....