2018 (10) TMI 1865

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....ition of Rs. 1,34,08,792/- for non deduction of TDS made by the AO u/s 40(a)(ia) read with section 194C inspite of there being relation of "Contractor" and "Contractee" between the owner and the supplier as per terms of agreement dated 13.7.2005, in the name and style of "FOOD SUPPLY ARRANGEMENT". 2. At the outset Ld. Counsel for the assesse submitted that exactly similar issue was involved in the assessment year 2006-07 and matter has been heard by the Tribunal on 31st July, 2018. On the other hand Ld. DR also accepted that the issue involved is exactly the same as was there in the assessment year 2006-07. The brief facts of the case are that assesse company is engaged in the business of running a restaurant with the name of Zen Restaur....

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....d for 'Food Supply Arrangement', wherein the assessee company is the owner and M/s. Zen Chinese Food is a supplier. As per the agreement assessee was to make available kitchen space to cook Chinese Food with free electricity and water and the supplier has to arrange for all kitchen equipment, trained cooks, helpers and other staff and also purchase the material. Prior to this agreement, the agreement between the assessee company and the M/s. Zen Chinese Food was that the assessee was selling the Chinese food prepared by M/s. Zen Chinese Food and commission @45% of the sale was paid to it. After this period, the arrangement was only for supply arrangement which is evident from the relevant clauses as noted by the Assessing Officer:- ....

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....rior notice in writing to the "owners". In case of any mismanagement or breach of the terms of this agreement the "owners" may also terminate the supplier arrangement by giving one month prior notice in writing informing the "suppliers" of such breach." 3. The Assessing Officer recorded the statement of Director of the assessee-company from where he gathered that the assessee earlier used to get commission on sale of Chinese food and he had made the contract agreement in the year 1992 and was working successfully as contract for last 16 years. From this statement, Assessing Officer interpreted that there is a contract agreement between the assessee and M/s. Zen Chinese Food which has been termed as 'Food Supply Arrangement'. Since ....