DELHI MILK SCHEME Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is aggrieved by an order dated 20th January, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench C in ITA (TDS) No. 102 and 103/del/2003 relevant for the assessment years 2002-2003 and 2003-2004 respectively.

(2.) THE issue that arises in this case is whether the assessee was liable to deduct tax at source on milk and milk products sold by it through 'concessionaires appointed by it.

(3.) A survey operation under Section 133a of the Income Tax Act, 1961 (the act) was carried out on 12th June, 2002 on the basis of information that the assessee was not deducting tax at source on the commission paid by it to its agents (called concessionaires) who sell milk on behalf of the assessee. During the course of survey, it was found that the information was correct and it was also found that the assessee has appointed a large number of agents all over delhi to sell milk and milk products from booths which are owned by the assessee. The assessee appoints its agents by issuing appointment letters to them and also enters into an agreement with them specifying the terms and conditions of the appointment. A commission is paid to the agent for the goods sold. In respect of the milk which is not sold, the same is taken back by the assessee. Cash collections are daily made by the assessee from the concessionaires.