2019 (2) TMI 672

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....bt that during the period 2004-05 to 2007-08, the appellant had received commission from the union on which the income tax was deducted at source for which even a TDS certificate in Form-16A was issued, the appellant's society had received commission from the union which was for the services provided to them, a show cause notice dated 16.10.2009 was issued. The specific averment in the show cause notice (SCN) reads as under:- "3.2. In this case the commission received by the society for the service provided by them was for 'Promoting or marketing or sale of Milk and Milk products' produced by M/s. Erode District Co-operative Milk Producers' Union (EDCMPU in short) as discussed above and the said service is squarely covered under the defi....

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....uments. It is undisputed that the invoices raised by the union on the appellant society carries the word 'Agency' and it is also undisputed that the Union, while making the payment to the society, has deducted tax at source and issued Form-16A which is the typical characteristic of commission. Perusal of the invoices shows that the indicated quantity of milk and allied products was sold to the appellant society by the union. Other undisputed fact is that each of these invoices the final amount due to be paid is arrived at after mentioning what the revenue areas as commission, or a trade discount, as per the appellant society. These invoices when read in juxtra position with the trading account of the appellant, the purchase of milk stands e....

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....0) STC 42 (SC), wherein, the Hon'ble Supreme Court while interpreting the terms of the agreement therein has held that what is to be looked into is the substance and not the form of it and the relevant observations reads as under:- "............ from the fact that the word 'agent' or 'agency' is used or words 'buyer' and 'seller' are used to describe the status of the parties concerned is not sufficient to lead to the irresistible inference that the parties did in fact intend that the status would be conferred. Thus, the mere formal description of a person as an agent or buyer is not conclusive, unless the context shows that the parties clearly intended to treat a buyer as a buyer and not as an agent....................." "The essence of....