ACIT, New Delhi V. M/s Mother Dairy Food Processing Ltd., New Delhi

ITA 1681/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61775 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 01-05-2012
• Assessment Year: misc
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: MANJU BHARDWAJ
• Section: 133A; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO. 1681/DEL/11 A.YR. 2005-06 ACIT CIR. 50(1), VS. M/S MOTHER DAIRY FOOD PROCE SSING LTD. NEW DELHI. NOW AMALGAMATED WITH MOTHER DAIRY FRUIT & VEGETABLE PVT. LTD., PATPARGANJ, DELHI-110092. PAN: AADCM 0501 G ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SH. R.S. NEGI SR. DR RESPONDENT BY : MS. MANJU BHARDWAJ CA O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 7-1-2011, CHALLENGING THE DELETION OF PENALTY OF RS. 23,10,68 9/- LEVIED U/S 271C OF THE I.T. ACT, RELATING TO A.YR. 2005-06 2. BRIEF FACTS ARE: DURING THE COURSE SURVEY CONDUC TED ON 9-12-2004, U/S 133A OF THE I.T. ACT, AT THE PREMISES OF ASSESSEE, IT WAS FOUND TO HAVE MADE CERTAIN PAYMENTS ON ACCOUNT OF PURCHASE OF PRINTED PACKAGING MATERIAL ON WHICH TDS WAS NOT DEDUCTED U/S 194C OF THE I.T. ACT . ASSESSING OFFICER RAISED A TDS LIABILITY OF RS.71,74,722/- AND THERE AFTER INITIATED PENALTY PROCEEDINGS U/S 271C OF THE I.T. ACT. IN THESE PROC EEDINGS ASSESSEE ARGUED THAT DURING SEVERAL ASSESSMENT YEARS IT HAD PURCHA SED PACKING MATERIAL FROM VARIOUS SUPPLIERS IN FORM OF ICE CREAM CUPS, C ARTONS, PLASTIC PACKAGING ETC. ASSESSEE PLACED CORRESPONDENCE WITH THE SUPPLI ERS, WHICH REFLECTED THAT THE RAW MATERIAL FOR MANUFACTURE OF PACKAGING MATER IAL WAS PURCHASED BY 2 THE SUPPLIERS THEMSELVES AND NOT SUPPLIED BY THE AS SESSEE. THE PURCHASE FROM SUPPLIERS ARE MADE FOR THE PURPOSE OF PACKAGIN G AND PRINTING OVER THE PACKING MATERIAL, WHICH IS INCIDENTAL FOR THE SUPP LIES OF THE PACKING MATERIAL. THE AO HAS TREATED SUCH CONTRACTS WITH SU PPLIERS AS CONTRACT FOR WORK UNDER SECTION 194C AND NOT A CONTRACT FOR SALE OF GOODS. 2.1. ASSESSING OFFICER, HOWEVER, WITHOUT APPRECIATI NG THE MATERIAL ON RECORD IMPOSED THE PENALTY. AGGRIEVED, ASSESSEE PRE FERRED FIRST APPEAL, WHERE CIT(A) DELETED THE PENALTY BY FOLLOWING OBSE RVATIONS: I HAVE CONSIDERED THE ARGUMENTS TAKEN BY THE APPEL LANT AND THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE ORDE R OF MY PREDECESSOR PASSED IN APPEAL NO. 24/08-09 DATED 9-1 0-09. IN APPELLANTS OWN CASE THE HONBLE ITAT IN HIS ORDER NOS. ITA NO. 385/DEL.2010, 3468/DEL/2008 AND 4831/DEL/2009 H AS STATED THAT, THE PRINTING MATERIAL PURCHASED BY THE ASSESSEE CAN BE TREATED AS WORK OF ANY SPECIAL SKILL OR SECRECY, THE TRANSACTION BETWEEN THE ASSESSEE AND PRINTING MATERIAL SUPPLIERS BEING ONE OF SALE AND PURCHASE OF GOODS UNDER SALE OF GOODS ACT, THE SAME IS NOT LIABLE FOR REDUCTION U/S 194C. OUR VIEW IS FORTIFIED BY HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF DABUR INDIA LTD. (SUPRA). RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE ASSESSEE IS NOT LIABLE FOR TDS IN RESPECT OF PRINTI NG MATERIAL PURCHASED BY IT AND THIS GROUND OF ASSESSEE FOR A.YS. 2004-05 AND 2005-06 IS ALLOWED. RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE ITA T THE PENALTY UNDER SECTION 271C LEVIED BY THE ADDL. CIT AMOUNTING TO RS. 23,10,689/- IS HEREBY DELETED. 3 2.2. AGGRIEVED, REVENUE IS BEFORE US. LD. DR RELIE D ON THE ORDER OF ASSESSING OFFICER . 3. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AND ARGUMENTS AND CONTENDS THAT IN QUANTUM APPEAL, IN ASSESSEES OWN CASE FOR A.Y. 2004- 05 & 2005-06, THE ITAT DELHI BENCH E VIDE CONSOL IDATED ORDER DATED 10- 5-2010 RENDERED IN ITA NO. 4831/DEL/09 & OTHERS, HA S HELD THAT ASSESSEE IS NOT LIABLE FOR TDS IN RESPECT OF PRINTING MATERIAL PURCHASED BY, INTER ALIA, OBSERVING AS UNDER: 11. APROPOS THE ISSUE ABOUT SECTION 194C, IT HAS N OT BEEN CONTENDED BY LEARNED DR THAT THE PRINTING MATERIAL PURCHASED BY THE ASSESSEE CAN BE TREATED AS WORK OF ANY SPECI AL SKILL OR SECRECY, THE TRANSACTION BETWEEN THE ASSESSEE AND P RINTING MATERIAL SUPPLIES BEING ONE OF SALE AND PURCHASE OF GOODS UNDER SALE OF GOODS ACT, THE SAME IS NOT LIABLE FOR DEDUC TION U/S 194C. OUR VIEW IS FORTIFIED BY HONBLE DELHI HIGH C OURT JUDGMENT IN THE CASE OF DABUR INDIA LIMITED (SUPRA) . RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE A SSESSEE IS NOT LIABLE FOR TDS IN RESPECT OF PRINTING MATERIAL PURCHASED BY IT AND THIS GROUND OF ASSESSEE FOR ASSESSMENT YEARS 2004-05 AND 2005-06 IS ALLOWED. 3.1. LD. COUNSEL SUBMITTED THAT IN VIEW OF THE FACT THAT THERE REMAINS NO TDS LIABILITY, THE LEVY OF PENALTY U/S 271C HAS BEE N RIGHTLY DELETED BY CIT(A) AND REVENUES APPEAL SHOULD BE DISMISSED AS SUCH. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN QUANTUM APPEAL, SI NCE THE ITAT HAS HELD THAT ASSESSEE WAS NOT LIABLE FOR TDS IN RESPECT OF PRINTING MATERIAL PURCHASED BY IT, THEREFORE, THE VERY BASIS FOR LEVY OF PENALTY HAS GONE. IN 4 VIEW OF ABOVE, WE FIND NO FORCE IN REVENUES APPEAL AND THE SAME IS LIABLE TO BE DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13-07-2012. SD/- SD/- ( K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:13-07-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR