This is appeal filed by assessee against order of learned CIT(A)-XXX, New Delhi in Appeal No. 25 of 2008-09, dt. 31st July, 2008 for financial year 2003-04. Shri C.S. Aggarwal, senior advocate along with Shri Ravi Pratap Mal, advocate represented on behalf of assessee and Shri B.K. Gupta, senior Departmental Representative represented on behalf of Revenue. facts that have led to this appeal are that there was survey operation under s. 133A of IT Act on business premises of Mother Dairy Foods Processing Ltd. on 9th Dec., 2004. In course of survey various agreements entered into by assessee with concessionaires who sell milk and other milk products of assessee company from booths owned by assessee h d been found. AO had on ground that agreement with concessionaires were agreement between principal, being assessee and agent, being concessionaires had held that provisions of s. 194H was attracted on difference between MRP and sale price charged by assessee to concessionaires and as assessee had not deducted TDS at requisite rates, had passed order under s. 201(1) and 201(1A) of Act on 31st March, 2008 holding assessee to be assessee in default. Aggrieved assessee had filed first appeal to learned CIT(A) who had confirmed order of AO. Aggrieved assessee had filed this appeal. At time of hearing it was submitted by learned counsel on behalf of assessee that assessee enters into agreement usually with ex- serviceman (concessionaires) for sale of liquid milk, fresh fruits and vegetables, ice-creams, juices, vegetable products, etc. These concessionaires run milk booths and shops on principal-to-principal basis as per terms or agreement. booths and plant and machinery, i.e., chilling plant, dispensing machine and weighing machinery etc. in booths belong to assessee. All incidental and necessary infrastructure are provided and maintained by assessee. necessary licenses for running booths are obtained by concerned concessionaires. It was submission that assessee sells its products to concessionaires who then sell same to customers on retail. He drew attention to pp. 39 to 53 of paper book as also pp. 78 to 96 of paper book which were copies of agreements entered into between assessee and concessionaires. agreement at pp. 78 to 96 was copy of agreement of September, 1993 and agreement at pp. 39 to 53 was agreements entered into in January, 2003. He submitted that agreements of both 1993 and 2003 were identical and these were also agreements, which had been found in course of survey. He further drew attention to various clauses of agreement of 2003 more specifically cl. 25 of agreement to show that concessionaires has to pay sale price of various products on receipt of same from assessee. He further drew attention to cl. 26 which stated that full sale consideration has to be paid immediately through account payee cheques from his own bank account only. He further drew attention to cl. 28 which specified that once milk is sold by assessee to concessionaires title of milk so sold would immediately passed to concessionaires. He drew attention to cl. 31 which specified that responsibility for any variation in quality or quantity of milk sold from his shop as per provisions of capital PFA Act and Weights and Measures Packaged Commodities Act and its Rules after taking delivery of same from assessee was responsibility of concessionaires. He drew attention to cl. 34 which specified that concessionaires are not selling milk to public or and on behalf of assessee or as assessee s agent, servant o r employee but he was doing so on his own behalf and as owner, of said milk. He further drew attention to cl. 37 which specified that milk so sold by assessee to concessionaires Would not be accepted back in full or in part for any reason whatsoever or under any circumstances. said cl. 34 has also been reiterated with further clarifications in cl. 51. It was his submission that on reading of agreement, same was to be read as contract entered into between 2 persons and both parties having specifically understood same and having accepted that there would be no principal agent relationship nor employee, employer relationship but to be commercial one, relationship between 2 persons could not be read to be one of principal and agent by Revenue. It was his further submission that 2 circulars had been found in course of survey wherein term commission had been mentioned. I t was his submission that said circulars related to retailers distributors and transporters with whom also assessee was dealing in and it did not relate to transaction with concessionaires. He drew attention to pp. 54 and 55 of paper book, which was copy of 2 circulars. At p. 54 was Circular dt. 28th July, 2003 which was in Hindi and English translation therein was shown at p. 33 and it read as "attractive scheme for light milk to all retailers, distributors and transporters". As per said circular there was no term of commission in said circular and all it said was that extra income as per incentive scheme was being granted and as per said scheme present discount at 80 paise per liter had been increased to 1 rupee 80 paise. second circular of 14th Sept., 2002 was in English, which has been addressed to all retailers (insulated containers/HAVA). In said Circular it is mentioned that commission on bulk vended tonned milk has been revised from 20 paise per liter to 40 paise per litre. He further drew attention to sale invoice-cum- delivery challan copies at pp. 4C and 4D wherein sales-tax has been collected by assessee on basic price. These invoices are of September, 2003 and related to Lodhi Colony and Kidwai Nagar East. He also drew attention to pp. 56 and 57 of paper books, which were copies of sale invoice/delivery challan in regard to various categories of milk supplied on which no sales-tax has also been levied. It was submission that no sales-tax was leviable on said milk as per said invoice which was of 2008 March. It showed basic price for one liter milk at Rs. 17.80 paise whereas selling rate as per market rate is Rs. 19 per litre. Thus leaving margin of Rs. 1.20 market rate or MRP has not been mentioned in sales invoice/delivery challan of March, 2008. It was thus his submission that as per delivery challan/invoice as also agreements entered into by assessee with concessionaires, transaction between assessee and concessionaires was one of principal- to-principal. It was submission that no commission had been paid by assessee to concessionaires. He also pointed out difference between invoices at pp. 4C and 4D of paper book as also pp. 56 and 57 of paper book wherein in pp. 56 and 57 there are retailer codes and same are retail invoices. Whereas in pp. 4C and 4D there is no mention of retail invoice nor is retail code specified. It only specifies point number and party name and location. Thus it was submission that at pp. 56 and 57 were retail transactions, which had also been accepted by Revenue to be one of purchase and sale and invoice at pp. 4C and 4D were transaction with concessionaires. In transaction with retailers found at pp. 56 and 57 MRP was not mentioned, whereas in regard to transaction with concessionaires, even MRP has been specifically mentioned. It was his further submission that this Tribunal in case of Delhi Milk Scheme vs. CIT (2008) 218 CTR (Del) 630: (2008) 301 ITR 373 (Del) had held that sums paid by assessee therein to agents who are merely rendering their services for selling products was commission and not discount of sales and consequently, provisions of s. 194H had attracted in respect of payment made to agents. It was submission that this decision of Tribunal had also been upheld by Hon ble jurisdictional High Court in Delhi Milk Scheme s case (supra). It was submission that said decision did not apply to assessee s case insofar as this Tribunal had given categorical finding that agreements which had been found in course of survey in case of Delhi Milk Scheme (supra) had been redrafted and it was redrafted agreements which had been produced before CIT(A) and Tribunal in that case. This Tribunal had also categorically given finding that on basis of agreements found in course of survey in that case transaction between assessee therein and concessionaires was one of principal and agent and redrafting of agreements was only afterthought. In present assessee s case, it was submission that such was not case and right from 1993 till today intention had been to deal with concessionaires on principal-to-principal basis. It was thus submission that decision in case of Delhi Milk Scheme (supra) did not apply to assessee s case and learned CIT(A) was wrong in saying that distinguishing factors as pointed out between case of Delhi Milk Scheme (supra) and that of assessee were minor and they were more of form and not substance. In reply, learned Departmental Representative vehemently supported orders of AO and learned CIT(A). It was submission that assessee supplied all equipment for dispensation of milk and milk products and other products of assessee through booths owned by assessee to concessionaires and concessionaires were acting only as agents of assessee. It was submission that concessionaires had to function according to strict terms and condition imposed by assessee company and they were also subject to daily monitoring by assessee company. It was further submission that even registers are maintained by concessionaires as per instructions of assessee and reports had also been given to officials deputed by company and consequently, relationship was liable to be treated only as principal and agent and so-called discount given to concessionaires was in fact commission. We have considered rival submissions. perusal of agreement entered into by assessee to concessionaires clearly shows that concessionaires are duty bound to use premises and equipment as belonging to assessee. agreements also clearly show that control over shops is with company. tokens for sale of milk at shops are to be purchased by concessionaires from assessee and milk is sold on basis of said tokens, which are to be used for dispensing t h e requisite quantity of milk from machines installed at shops. tokens are purchased by consumers from concessionaires and such tokens are used for obtaining milk from machines. perusal of agreement clearly shows that concessionaires have to pay consideration as per delivery invoices at time of delivery of milk and any quantity of unsold milk is to be recorded within 15 minutes of close of scheduled vending time or before supply of milk is taken by concessionaires from assessee whichever is earlier. agreement also clearly shows that assessee would not take back any portion of unsold milk in any condition whatsoever. perusal of customer detail trial balances found at pp. 4E, F, G and H of paper book show that during day concessionaires takes two deliveries of milk. quantity of milk that is purchased by concessionaires varies, continuously ranging from minimum of 40 liters to maximum of 120 liters. For example on 3rd September said consessionaires had taken 120 liters on first purchase and on second purchase 100 liters, on 4th Sept., 2003, 60 liters on first purchase and 90 liters on second purchase. Obviously, this when read with clauses of agreement would mean that at end of time of vending balance milk as available with concessionaires would be considered and considering average milk required on day, concessionaires would buy requisite quantity less closing stock on next purchase. terms of agreement also clearly show that concessionaires have responsibility to keep milk under necessary refrigerated conditions. terms of agreement also clearly show that milk once sold to concessionaires would be exclusive property of concessionaires and same would not be taken back under any condition. This would clearly mean that if milk is spoiled, loss on same would be t o cost of concessionaires. Liberty has been retained with concessionaires to have sample of milk collected in presence of delivery staff and to test same at its own cost or to get same tested free of cost by assessee s laboratory. Similarly assessee has also retained right of inspection and collection of sample milk and checking its quality and quantity in regard to concessionaires at any time. Any variation/deterioration in quality or quantity of milk sold by concessionaires would result in termination of agreement. perusal of invoice as raised on concessionaires also clearly shows that sales-tax has been collected by assessee on basic price. Obviously, sales-tax is leviable on sales. fact that sales-tax has been collected on sales made to concessionaires clearly show that intention of assessee by raising invoice-cum- delivery challan specifying sales-tax is to specify sale of product. If sale was on commission basis details of sales-tax was not required to be shown in invoice/delivery challan issued to concessionaires. perusal of circulars which had been relied upon by Revenue which had been found in course of survey also clearly show that it relates to retailers/distributors and transporters and not concessionaires. This is because invoice-cum- delivery challan in regard to concessionaires was also different from that issued to retailers. Further on specific query from Bench as to whether agreements as produced in paper book were copies of agreements found in course of survey, it had been agreed that same were sample of copies of agreements found in course of survey. decision of Hon ble jurisdictional High Court in case of Delhi Milk Scheme (supra) confirming decision of this Tribunal also clearly show that fact in case of Delhi Milk Scheme (supra) was completely different from facts in present case. facts as recorded by Tribunal in case of Delhi Milk Scheme (supra) are as follows: "The facts emerging from orders of tax authorities below and which also remained uncontroverted before us are that during course of survey on 12th J u n e , 2002, Department found appointment letters of certain agents/concessionaires as well as agreements with those agents indicating that assessee, DMS, was selling its milk and milk products to them. certified copies of appointment letters and agreements obtained during course of survey were annexed as Annexs. and B . As per these agreements agents/concessionaires appointed by DMS numbering 1,600 were to sell milk and milk products from booths owned by DMS on commission basis rate of which was mentioned in those, agreements/appointment letters, as detailed in orders of tax authorities below. It was further mentioned in those agreements executed between DMS and concessionaires/agents that supply of products of DMS would be made by DMS through DMS vans which were to be sold by agents/concessionaires on commission . ownership of milk booths would rest with DMS and that DMS would not charge any rent from agents. unsold milk from agents would be taken back by DMS. agents were barred from selling any other product of any other brand. sale collections were collected by cash clerk of DMS from these booth operators. As per para 4.1(2) of agreement concessionaires shall have no right, title or interest over said milk booth and other items provided/to be provided in said milk booth from time to time and shall not claim any right whatsoever in respect of said milk booth or any part thereof. Further, in sub-para 3 of para 4.1 of agreement it is mentioned that possession and control of said milk booths as also other property movable/immovable of said booths shall be with DMS and DMS shall always have right to enter said milk booths and take over charge thereof at any time without any reason and without any intimation to concessionaire. In addition thereto Shri Ram Swaroop, Manager (Distribution) in sworn statement in reply to question of AO specifically indicated that sale collections were collected by cash clerk of DMS subsequently from booth operators indicating that milk and milk products were in fact not sold by DMS to agents/concessionaires but were only delivered to be sold by them on commission basis at rates fixed in agreements. From uncontroverted facts mentioned herein above based on appointment letters and agreements obtained at time of survey by Department it is clear that ownership of milk and its products supplied by DMS at DMS booths to agents through delivery vans for sale on commission basis rested with DMS. agents/concessionaires had no right whatsoever on milk and milk products supplied by DMS except selling same on commission basis." Further it was categorically found by this Tribunal in case of Delhi Milk Scheme (supra) that agreement had been redrafted after date of survey and findings of this Tribunal in regard to redrafting of agreements is as follows: "Now, important thing to be mentioned is that agreements/appointment letters first time produced before CIT(A) were not made available to Department at time of survey. It means that DMS has redrafted agreements and appointment letters after date of survey wherein, word commission used in appointment letter and agreement found during survey replaced by word discount in newly drafted appointment letter and agreement. Similarly, in newly drafted agreement and appointment letter words rate of commission has been replaced by words rate of discount ." On basis of these facts this Tribunal had arrived at conclusion that transaction therein was one of commission. findings therein are as follows: "From these facts it is clear that redrafted agreement/appointment letters first time produced before learned CIT(A), incorporating word discount in place of commission and words "DMS accepts unsold milk from concessionaires", with words "the unsold milk from agents is not taken back by DMS" was afterthought and was ploy used by assessee to come out from mandatory requirement of deducting tax at source on payments made to agents/concessionaires, so, redrafted agreement/appointment letters produced for first time before CIT(A) cannot be accepted in evidence being in genuine. Whereas, on basis of agreement/appointment letters executed between assessee and agents/concessionaires duly certified by manager of DMS and given to Department during course of survey it is established by Department that milk and milk products and milk booths were owned by DMS; unsold milk was taken back by DMS from agents/concessionaires and cash collection was daily handed over to DMS by agents and lastly agents simply rendered services for selling milk to customers and ownerships of goods did not pass over to agents/concessionaires as there was no sale to agents/concessionaires." Thus it was after considering agreements found in course of survey and redrafted agreement, this Tribunal had come to conclusion in case of Delhi Milk Scheme (supra) that transaction between Delhi Milk Scheme n d its concessionaires was in fact one to which provisions of s. 194H attracted. In present case it is found that there has been no redrafting of agreements and agreements as placed before us being same as was found in course of survey and as per terms of agreement which are identical even in 1993 as also in 2003, discount as given by assessee to its concessionaires are nothing but discount and do not have any characteristics of commission. Consequently, we are of view that decision of Hon ble jurisdictional High Court upholding order of this Tribunal in case of Delhi Milk Scheme (supra) would have no application to assessee s case insofar as facts, as also terms of agreement are completely different. Further just because assessee keeps substantial control over concessionaires it cannot be said that relationship is one of principal and agent, as control would have to be seen when these agreements were drafted. Obviously any body who gives his space, machinery and equipment to another would like to put substantial clauses which can be invoked to cancel such agreements if it is found that person they are pealing with is not trustworthy or is doing anything to detriment of assessee. In such circumstances it cannot be said that strict control clauses of agreement makes transaction between assessee and concessionaires to be one o f principal and agent. If actual functional and operational clauses of agreements are seen it would clearly show that it is one between two principals to which provisions of s. 194H would not apply. In these circumstances, we are of view that provisions of s. 194H would not be attracted on discounts given by assessee to its concessionaires and consequently order of learned CIT(A) as also AO passed under s. 201(1) and 201(1A) are set aside. In circumstances, appeal of assessee is allowed. *** Mother Dairy India Ltd. v. Income-tax Officer, Ward-50(4)