CIT Vs. Jai Drinks (P.) Ltd. (Delhi HC) – In this case, it was found that, to the extent that the agreement between the notator and the distributor clearly stated that the agreement was based on the main principle, the payments made by the evaluator to the distributor were incentives and rebates and should not be considered a commission for the deduction of the tax at source under section 194H of the Act. … noted that the sale of the respondent to the merchants was on a principled basis and that the commission paid to the merchants in the nature of the respondents` commercial rebate and essueur… between the respondent and the merchants on a “principle in principle” basis and that it was an absolute sale that the respondent made in favour of the merchants. The merchant is required to pay the full payment of… Traders and the sale were “prinzipal-zu-Prinzip-Basis”. 10.
The Court of Justice in Union of India v. Bombay Tyre International Ltd… 8. A review of the agreement shows that the notator had authorized the distributor to sell its products in a specific ITA NO. 399/2010 page 5 on 8 domains. The distributor should only trade products of persons noted in a specific area. The products had to be purchased by the distributor against 100% in advance from the examiner, although the decision was made by the examiner to credit the products to the distributor. At all times, the distributor should maintain the minimum stock and handle only the expert`s products. The distributor should maintain its operational infrastructure, including the necessary personnel, under its responsibility for the PF contribution, the ESI contribution, etc., in accordance with the law. Article 16 expressly specifies that the agreements are in principle concluded within the framework of this agreement and that nothing in that agreement is construed as conferring on an agent the power to bind the notator. Section 17 expressly states that the merchant should purchase the notator`s products and give a discount on the amount of the printed provision on a case-by-case basis. In the event of a break,leak, etc., it is the trader, not the expert, who is responsible.
Not only that, but also all authorizations, consents, registrations, licenses, etc. ITA No. 399/2010 Page 6 of 8 may be required by departments or authorities if the distributor is requested. 9. It is clear from all that has been mentioned above that the distributor should purchase products at the predetermined price from the notator for the sale of the latter in a specified area. Products must be purchased by the distributor for 100% in advance or can be made on credit at the notator`s discretion. The expert and the distributor both collected their VAT separately and had to collect it in any selection. Both sides clearly understood and accepted the agreement between them. Since this was an agreement between the notator and the distributor, it could not be said that the relationship between them was that of the principal representative.
On the other hand, it was clearly established that this was an agreement between them on the basis of a principle in principle. Both CIT (A) and ITAT correctly found that the notator`s payments to the trader were incentives and rebates, not commissions. We do not find any fragility in the results of CIT (A) and also of ITAT. It also means that a transaction does not involve any intermediary or agent. In this sense, a principle means both parts of a case, without the services of the officers taking the mouth. … Sellers on the basis of principle in principle. The Court found that the producer and its distributor had a common interest in maximizing the sale of the products. The provisions of the treaty between…
principle-to-principle for sale.4.