The ACIT, Bhopal V. M/s Lilasons Breweries Ltd, Bhopal

ITA 288/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2774 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: M C MEHTA; HITESH CHIMNANI CAS
• Section: 194C

Judgement Text

PAGE 1 OF 4 -. I.T.A.NOS. 268 & 288/IND/2009 LILASONS INDUSTRIES LIMITED & LILASONS BREVERIDES L TD., BHOPAL. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAACL5311N I.T.A.NO. 268/IND/2009 A.Y. : 2006-07 ACIT, 2(1), M/S. LILASONS INDUSTRIES LIMITED, NO.410 & 412, 243, DYNAMIC CENTRE, BHOPAL. VS ZONE 1, M.P. NAGAR, BHOPAL. APPELLANT RESPONDENT PAN NO. : AAACL5312R I.T.A.NO. 288/IND/2009 A.Y. : 2006-07 ACIT, 2(1), BHOPAL. M/S. LILASONS BREVERIES LIMITED, INDUSTRIAL AREA, GOVINDPURA, BHOPAL. VS APPELLANT RESPONDENT APPELLANT BY : SHRI P.K.MITRA, SR. DR RESPONDENTS BY : SHRI M. C. MEHTA AND SHRI HITESH CHIMNANI, CAS DATE OF HEARING : 24.06.2010 PAGE 2 OF 4 -. I.T.A.NOS. 268 & 288/IND/2009 LILASONS INDUSTRIES LIMITED & LILASONS BREVERIDES L TD., BHOPAL. O R D E R PER V.K. GUPTA, A.M. BOTH THESE APPEALS ARE FILED BY THE REVENUE AND IN VOLVE ISSUES OF APPLICABILITY OF SECTION 40(A)(IA) OF THE ACT IN RE SPECT OF DEDUCTION OF PURCHASES MADE BY THE ASSESSEE OF LABELS AND CROWN CORKS, WHEREIN THE TAX AT SOURCE HAD NOT BEEN DEDUCTED. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAG ED IN MANUFACTURING OF BEER AND PURCHASED PRINTED LABELS AND CROWN CORKS FOR ITS MANUFACTURING ACTIVITIES. THE AO HELD THAT SUCH PURCHASES WERE OF NATURE OF WORK CONTRACT, THEREFORE, THE ASSESSEE SH OULD HAVE DEDUCTED TAX AT SOURCE U/S 194C AND SINCE THE ASSESSEE HAD NOT D ONE SO, HE DISALLOWED THE ENTIRE AMOUNT SPENT BY THE ASSESSEE ON THE PURC HASES OF THESE ITEMS BY INVOKING PROVISIONS OF SECTION 40(A)(IA). AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHEREIN IT WAS CONTENDED THAT PURCHASE OF THESE ITEMS WERE NOT COVERED WITHIN THE DEFINITION OF WORKS CONTRACT U/S 194C OF THE ACT. THE ASSESSEE ALSO SUB MITTED THAT THE SUPPLIER HAD CHARGED SALES TAX AND EXCISE DUTY, WHI CH FACT ALSO SUPPORTED THE CLAIM OF THE ASSESSEE. THE ASSESSEE ALSO RELIED ON VARIOUS JUDICIAL PAGE 3 OF 4 -. I.T.A.NOS. 268 & 288/IND/2009 LILASONS INDUSTRIES LIMITED & LILASONS BREVERIDES L TD., BHOPAL. DECISIONS AS WELL AS RELEVANT CIRCULARS ISSUED BY THE CBDT FROM TIME TO TIME, WHEREIN IT WAS MENTIONED THAT IN RESPECT OF A GREEMENT OF PURCHASE, PROVISIONS OF SECTION 194C WERE NOT APPLICABLE AND EVEN THE CUSTOMIZES PURCHASES DID NOT CEASE TO BE PURCHASES. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. SENIOR D.R. PLACED STRONG RELIANCE ON THE O RDER OF THE AO, WHEREAS THE LD.COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE HON'BLE BO MBAY HIGH COURT IN THE CASE OF BDA LIMITED VS. ITO, AS REPORTED IN 281 ITR 99 AND THIS DECISION WAS ALSO APPROVED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ADIDAS INDIA MARKETING, AS REPORTED IN 322 ITR (ST) 9, WHEREIN THE SLP FILED BY THE DEPARTMENT HAD BEEN DISMISSED . 5. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. \ 6. AS FAR AS NATURE OF TRANSACTION IS CONCERNED, IT IS NOT IN DISPUTE THAT IT IS A CASE OF PURCHASES FROM SUPPLIERS AS PE R THE REQUIREMENT OF THE ASSESSEE. HENCE, AS PER THE RELEVANT PROVISIONS APP LICABLE AT THAT TIME, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE. THIS VIEW DULY FINDS SUPPORT FROM THE DECISION OF THE HON'BLE BOMBAY HIG H COURT IN THE CASE OF BDA LIMITED (SUPRA) RELIED ON BY THE ASSESSEE TH E RATIO OF WHICH HAS BEEN APPROVED BY THE HON'BLE SUPREME COURT ALSO. I N THESE PAGE 4 OF 4 -. I.T.A.NOS. 268 & 288/IND/2009 LILASONS INDUSTRIES LIMITED & LILASONS BREVERIDES L TD., BHOPAL. CIRCUMSTANCES, WE FIND NO MERIT IN BOTH THE GROUNDS OF THE REVENUE IN BOTH THE YEARS. THEREFORE, THE SAME ARE DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH JUNE, 2010. CPU* 246