ACIT, New Delhi V. M/s. Oriflame India Private Ltd., New Delhi

ITA 1411/DEL/2012

• Counselvise Citation: 141120114 RSA 2012
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-03-2015
• Assessment Year: misc
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1411/DEL/2012 1411/DEL/2012 1411/DEL/2012 1411/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005 - -- - 06 0606 06 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -5(1), 5(1), 5(1), 5(1), NEW DE NEW DE NEW DE NEW DELHI. LHI. LHI. LHI. VS. VS. VS. VS. M/S ORIFLAME INDIA PVT.LTD., M/S ORIFLAME INDIA PVT.LTD., M/S ORIFLAME INDIA PVT.LTD., M/S ORIFLAME INDIA PVT.LTD., L LL L- -- -29 2929 29- -- -34, IST FLOOR RADIAL 34, IST FLOOR RADIAL 34, IST FLOOR RADIAL 34, IST FLOOR RADIAL- -- -6, 6,6, 6, OUTER CIRCLE, OUTER CIRCLE, OUTER CIRCLE, OUTER CIRCLE, CONNAUGHT PLACE, CONNAUGHT PLACE, CONNAUGHT PLACE, CONNAUGHT PLACE, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. TAN : DELO00843D. TAN : DELO00843D. TAN : DELO00843D. TAN : DELO00843D. (APPELLANT) (RESPONDENT) CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION NO NONO NO .179/DEL/2012 .179/DEL/2012 .179/DEL/2012 .179/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2005 2005 2005 2005 - -- - 06 0606 06 M/S ORIFLAME INDIA PVT M/S ORIFLAME INDIA PVT M/S ORIFLAME INDIA PVT M/S ORIFLAME INDIA PVT .LTD., .LTD., .LTD., .LTD., L LL L- -- -29 TO L 29 TO L 29 TO L 29 TO L- -- -34, IST FLOOR, 34, IST FLOOR, 34, IST FLOOR, 34, IST FLOOR, RADIAL RADIAL RADIAL RADIAL- -- -6, OUTER CIRCLE, 6, OUTER CIRCLE, 6, OUTER CIRCLE, 6, OUTER CIRCLE, CONNAUGHT PLACE, CONNAUGHT PLACE, CONNAUGHT PLACE, CONNAUGHT PLACE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. TAN : DELO00843D. TAN : DELO00843D. TAN : DELO00843D. TAN : DELO00843D. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -5(1), 5(1), 5(1), 5(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P. DAM KANUNJHA , SR.DR. ASSESSEE BY : NONE. DATE OF HEARING : 16.03.2015 16.03.2015 16.03.2015 16.03.2015 DATE OF PRONOUNCEMENT : 01.04.2015 01.04.2015 01.04.2015 01.04.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THE APPEAL BY THE REVENUE AND THE CROSS-OBJECTION BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 ARE DIRECT ED AGAINST THE ITA-1411/D/2012 & C.O.179/D/2012 2 ORDER OF LEARNED CIT(A)-XXX, NEW DELHI DATED 24 TH JANUARY, 2012. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE AND THEREFORE, THE APPEAL OF THE REVENUE AND THE CROSS- OBJECTION OF THE ASSESSEE ARE BEING DECIDED EX PARTE QUA THE ASSESSEE ON MERITS AFTER HEARING THE LEARNED DR. ITA NO.1411/DEL/2012 ITA NO.1411/DEL/2012 ITA NO.1411/DEL/2012 ITA NO.1411/DEL/2012 REVENUES APPEAL : REVENUES APPEAL : REVENUES APPEAL : REVENUES APPEAL :- -- - 2. THE GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDE R:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LD.CIT(A) HAS ERRED (A) IN DELETING THE PENALTY LEVIED U/S 271C OF THE I.T. ACT, 1961 AMOUNTING TO RS.11,25,794/- BEING 100% OF TAX NOT DEDUCTED BY THE ASSESSEE ON CONTRACT PAYMEN T MADE TO M/S SILVER OAK LAB (P) LTD. (B) IN NOT APPRECIATING THE OBSERVATION OF THE ADD. CIT AS TO HOW THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SILVER OAK LABORATORIES LTD. WOULD SUPPORT THE CASE OF THE DEDUCTOR COMPANY AS NOTHING WAS BROUGHT ON RECORD NEITHER DURING THE PENALTY PROCEEDINGS NO R THE APPELLATE PROCEEDINGS TO PROVE THAT BOTH THE TRANSACTION I.E. PAYMENT MADE BY THE DEDUCTOR COMPANY TO SILVER OAK AND THE PAYMENT MADE BY M/S SILVER OAK TO OTHERS ARE ALIKE. 3. LEARNED DR SUBMITTED THAT THE ASSESSEE HAS FAILE D TO DEDUCT TDS ON CONTRACT PAYMENT MADE TO M/S SILVER OAK LABORATO RIES (P) LTD. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY LEARN ED DR AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT LEARNED CIT(A) HAS RECORDED A FINDING THA T THE PROVISION OF ITA-1411/D/2012 & C.O.179/D/2012 3 TDS UNDER SECTION 194C WAS NOT APPLICABLE TO THE AS SESSEES CASE ON PURCHASE OF MATERIAL AND, THEREFORE, PENALTY UNDER SECTION 271C OF THE INCOME-TAX ACT, 1961 COULD NOT BE IMPOSED ON THE AS SESSEE. WE FIND THAT THE ASSESSEE IS IN THE BUSINESS OF SELLING OF COSMETICS AFTER GETTING THEM MANUFACTURED FROM M/S SILVER OAK LABORATORIES (P) LTD. THE TDS PROVISIONS OF SECTION 194C(1) EXPLANATION (IV) DEFI NE THAT WORK SHALL INCLUDE MANUFACTURING OR SUPPLYING A PRODUCT ACCORD ING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM SUCH CUSTOMER AND FURTHER EXPLAIN TH AT IT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A PRODUCT ACCORD ING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON, OTHER THAN SUCH CUSTOMER. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE MATERIAL WAS PURCHASED B Y THE ASSESSEE FROM SUCH CUSTOMER AND, THEREFORE, WE HOLD THAT THE RE IS NO MISTAKE IN THE ORDER OF THE LEARNED CIT(A) IN HOLDING THAT THE PROVISION OF SECTION 194C DOES NOT APPLY TO THE CASE OF THE ASSESSEE BEI NG PURCHASE OF MATERIAL. ACCORDINGLY, THE ORDER OF LEARNED CIT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE REJECTED. ASSESSEES CROSS ASSESSEES CROSS ASSESSEES CROSS ASSESSEES CROSS- -- -OBJECTION NO.179/DEL/2012 : OBJECTION NO.179/DEL/2012 : OBJECTION NO.179/DEL/2012 : OBJECTION NO.179/DEL/2012 :- -- - 5. THE ONLY GROUND OF THE CROSS-OBJECTION OF THE AS SESSEE IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ASSESSING OFFICER ERRED IN FILING AN APP EAL BEFORE THE TRIBUNAL WITHOUT APPRECIATING THE DECISI ON OF THE CIT(A) IN APPLYING THE HON'BLE SUPREME COURT DECISION VIDE 18012/2009. ITA-1411/D/2012 & C.O.179/D/2012 4 6. WE FIND THAT THE GROUND OF THE CROSS-OBJECTION I S MERELY SUPPORTIVE OF THE ORDER OF LEARNED CIT(A) AND, ACCO RDINGLY, THE SAME IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS-OBJECTION OF THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2015. SD/- SD/- ( (( ( T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. REVENUE : ASSISTANT COMMISSIONER OF INC ASSISTANT COMMISSIONER OF INC ASSISTANT COMMISSIONER OF INC ASSISTANT COMMISSIONER OF INCOME TAX, OME TAX, OME TAX, OME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -5(1), NEW DELHI. 5(1), NEW DELHI. 5(1), NEW DELHI. 5(1), NEW DELHI. 2. ASSESSEE : M/S ORIFLAME INDIA PVT.LTD., M/S ORIFLAME INDIA PVT.LTD., M/S ORIFLAME INDIA PVT.LTD., M/S ORIFLAME INDIA PVT.LTD., L LL L- -- -29 TO L 29 TO L 29 TO L 29 TO L- -- -34, IST FLOOR, RADIAL 34, IST FLOOR, RADIAL 34, IST FLOOR, RADIAL 34, IST FLOOR, RADIAL- -- -6, OUTER CIRCLE, 6, OUTER CIRCLE, 6, OUTER CIRCLE, 6, OUTER CIRCLE, CONNAUGHT PLACE, NEW DELHI CONNAUGHT PLACE, NEW DELHI CONNAUGHT PLACE, NEW DELHI CONNAUGHT PLACE, NEW DELHI 110 001. 110 001. 110 001. 110 001. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR