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3. E-Commerce Sales (Third party): The assessee-company sells products via e-commerce platforms like Flipkart and Myntra on an SOR basis. Here also assessee-company reserves absolute rights to determine sale prices and discounts.

4. Company-Owned-Franchisee-Operated (COFO) Stores: Theassessee-company arranges the store space, while the franchise operates the business. The assessee-company supplies ITA No.5210,5211 & 5165/Mum/2024 House of Anita Dongre Pvt Ltd goods on an SOR basis and unsold items are returned. Sale prices and discounts are set by the assessee-company itself.

b. On the basis of facts gathered during survey proceedings, it was found that supply of goods to franchisee/E-commerce/LFS player under SOR basis is not sale transaction. This supply is also not on Principal to Principal basis. Though the company claims that supply to franchisee/E-commerce/LFS player is a sale transaction as invoice is raised and GST is ITA No.5210,5211 & 5165/Mum/2024 House of Anita Dongre Pvt Ltd paid to the government, in substance the supply is not a sale transaction. In reality, the franchisees/E-commerce/LFS players are being provided margin for acting like an agent for providing various services which culminates on the sale of goods of assessee company.

(iv) Sale to e-commerce: The Company provides its products to e-commerce players like Flipcart, Myntra etc.

2. The sale by the Respondent-assessee through all the aforesaid channels (also referred to as 'channel partners') are made on sales or return basis, i.e. goods are, in the first instance, sold to franchisee/LFS with the franchisee / LFS retaining the rights to return the goods as per the terms of the agreement. At the time of sale of goods by the Respondent-assessee to the franchisee / LFS, an invoice is raised on an amount mutually decided which is less than the Maximum Retail Price (MRP) and Goods and Services Tax (GST) is charged by the Respondent-assessee on the said sales. The franchisee / LFS would in turn sell the goods to the end customer in its own name. The franchisee / LFS would pay the sale consideration to the Respondent-assessee and would in turn collect the sale price from the customer. In the books of accounts of the Respondent-assessee, goods are treated as sold when invoices for the goods are raised, and ITA No.5210,5211 & 5165/Mum/2024 House of Anita Dongre Pvt Ltd goods are transferred to the franchisee/LFS. When goods are returned by the franchisee / LFS, a separate entry is passed for sales return.

8. We have heard the rival submissions and perused the material available on record. The modus operandi adopted by the assessee in relation to sale of goods pertains to sales effected through (i) Franchisee Owned and Operated Stores (FOFO), (ii) Large Format Stores (LFS), (iii) Company Owned Franchisee Operated Stores (COFO), and (iv) e-commerce platforms.

The revenue has challenged the impugned appellate order primarily on two grounds: