2024 (9) TMI 1379

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....er as well as the Learned CIT (A) NFAC erred on facts and in law upholding penalty of Rs. 1,23,313/- under section 271B. 2. The Ld. CIT(A) NFAC has failed to appreciate the arrangement of the Mother Dairy with the Appellant as per terms & conditions of the agreement, according to which the relationship between them is that of Principal & Agent and, therefore, there is no requirement of tax audit. The humble appellant was also not liable to have Tax Audit in view of Circular No. 452 F.No.201/3/85-IT(A-II) dated 17/03/1986. 3. Without prejudice to above ground, the Ld. CIT(A) NFAC has failed to appreciate the Appellant an ex-serviceman who was allotted Mother dairy milk booth as commission agent under Self-employment scheme ....

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....e assessee receives uniform and fixed margin/commission which constitutes his taxable income rather than total sales. During the Previous Year 2016-17, the assessee received/accrued gross commission of Rs. 4,62,000 which was duly accepted by the Assessing Officer/NFAC in regular assessment. 8. Further, the ld. counsel for the assessee drew our attention towards the salient Features of Self Employment Schemes of Directorate General Resettlement (DGR) for allotment of Mother Dairy Milk Booths to eligible ex-servicemen. As per said Scheme, in the case of Milk Booths, the ex-servicemen will get higher of the assured income of Rs 11000.00 or commission of 30-35 paisa per one litre sale of milk (revised from time to time) and 5 percent for oth....

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...., which is apparent from the certificate issued by the mother Dairy. Hence, it is argued that the sales proceeds of the assessee should be considered as the turnover of the assessee. 12. Having heard the rival submissions, we have perused the materials on record. We are inclined to agree with the AR that the DGR has used word Commission which shows that the relationship between the Mother Dairy is that of Principal (Mother Dairy) to agent (Assessee). Even though the Mother Dairy has given nomenclature of Principal-to- Principal in its certificate, the nature of activity undertaken by the assessee shows the actual relationship between the Mother Dairy and assessee is that of Principal to Agent. We say so because the Milk booth was allotte....