ITO (TDS) 2(3), MUMBAI V. MILTON GLOBAL LTD, MUMBAI

ITA 3169/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2864 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 133A; 194C; 201(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.3169 & 3170/MUM/2014 ASSESSMENT YEARS: 2004-05 & 2005-06 ITO(TDS)-2(3), R. NO.708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI-400002 / VS. M/S MILTON GLOBAL LIMITED, ASIAN BUILDING, 4 TH FLOOR, R. KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AACCM1997P / REVENUE BY SHRI VIJAY KUMAR SONI !'# $ / ASSESSEE BY NONE % & $ ' / DATE OF HEA RING : 28/10/2015 & $ ' / DATE OF ORDER: 06/11/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE AGGRIEVED BY THE IMPUGNED ORDERS DATED 18/02/2014 OF THE LD. FIRST A PPELLATE AUTHORITY, MUMBAI. THE ONLY COMMON GROUNDS RAISED IN THESE APPEALS PERTAINS TO NON-DEDUCTION OF TAX U/S 194J FROM REIMBURSEMENT OF EXPENSES TO MILTON CONSULTANC Y M/S MILTON GLOBAL LTD. ITA NOS. 3169 & 3170/MUM/2014 2 SERVICES AND THEREFORE, DELETING THE ADDITION MADE U/S 201(1)/201(1A) OF THE ACT BY HOLDING THAT THERE WAS NO LIABILITY TO DEDUCT TAX ON THE PAYMENTS MADE TO MIL TON PLASTICS LTD. 2. DURING HEARING OF THESE APPEALS, SHRI VIJAY KUM AR SONI, LD.DR, ADVANCED HIS ARGUMENTS WHICH IS IDENTI CAL TO THE GROUND RAISED, WHEREAS, NONE WAS PRESENT FOR THE AS SESSEE IN SPITE OF ISSUANCE OF REGISTERED NOTICE, THEREFORE, WE HAVE NOT OPTION TO PROCEED EX-PARTE, QUA THE ASSESSEE, AND T END TO DISPOSE OFF THESE APPEALS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.1. WE HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE LD. ASSESSING OFFICER FOUND THE ASSESSEE I N DEFAULT FOR NON-DEDUCTION OF TAX U/S 194C AND CONSEQUENT OR DER U/S 201(1)/201(1A) OF THE ACT. A SURVEY ACTION WAS CAR RIED OUT AT THE PREMISES OF THE ASSESSEE U/S 133A ON 16/02/2005 TO VERIFY WHETHER THE ASSESSEE HAS PROPERLY COMPLIED W ITH THE PROVISIONS CONTAINED IN CHAPTER XVIIB OF THE ACT. S TATEMENT OF CHIEF ACCOUNTANT OF THE ASSESSEE COMPANY WAS REC ORDED. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURNI SHED DETAILS CALLED FOR FROM TIME TO TIME. THE ASSESSIN G OFFICER HELD THAT THERE WAS NON-DEDUCTION OF TDS ON PURCHAS E OF PACKING MATERIAL AMOUNTING TO RS.1,08,90,875/- FROM VARIOUS VENDORS AND RS.1,65,73,913/- ON PURCHASE O F DIES AND MOULDS AND FURTHER NON-DEDUCTION OF TDS ON REIMBURSEMENT OF WARE HOUSING CHARGES OF RS. 5,73,1 68/- M/S MILTON GLOBAL LTD. ITA NOS. 3169 & 3170/MUM/2014 3 PAID TO MILTON PLASTIC LTD., NON-DEDUCTION OF TDS O N REIMBURSEMENT OF EXPENSES TO MILTON CONSULTANCY SER VICES, MILTON PLASTIC LTD, ETC. IT WAS NOTED BY THE ASSES SING OFFICER THAT THE APPELLANT WAS PURCHASING PACKING MATERIAL BEARING LOGO AND NAME OF THE COMPANY AS PER THE SPECIFICATI ONS PROVIDED BY THE ASSESSEE AS TO THE TYPE, SIZE, DESI GN AND LOGO ETC. THE CLAIM OF THE ASSESSEE WAS THAT THE ASSESS EE COMPANY IS PURCHASING PACKING MATERIAL FROM VARIOUS SUPPLIERS WHO USE THEIR OWN MATERIAL AND MANUFACTUR ING PROCESS. THE SUPPLIERS WERE CLAIMED TO BE REGISTER ED SUPPLIERS WITH SALES TAX AND EXCISE DEPARTMENT. IT WAS CLAIMED THAT IT WAS A CONTRACT OF SALE AND NOT ANY SERVICE OF CONTRACT, THUS, THE PROVISION OF SECTION 194C IS N OT ATTRACTED. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESSEE CLAIMED THAT THE SUPPLIERS ARE USING THEIR OWN MATERIAL, THEREFORE, IN VIEW OF THE RATIO LAID DOWN IN VADILAL DAIRY INTERNATIONAL LTD. VS ACIT 70 TTJ (PUNE) 77 A ND WHIRLPOOL OF INDIA LTD. 16 SOT 435 (DEL.), IT WAS A CLEAR CASE OF THEIR PURCHASES. THE ASSESSEE ALSO PLACE RELIANC E UPON CIRCULAR NO.13/2006 DATED 13/12/2006 OF CBDT. WE NO TE THAT IN PARA 3.3 OF THE IMPUGNED ORDER, THERE IS UNCONTROVERTED FINDING THAT THE ASSESSEE WAS PURCHA SING THE PACKING MATERIALS FROM VARIOUS SUPPLIERS AS PER SPECIFICATIONS GIVEN BY THE ASSESSEE AND THESE SUPP LIERS WERE USING THEIR OWN MATERIAL. THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) HAS ALSO RELIED UPON THE DECISION IN ASSOCIATED CEMENT COMPANY LTD. VS CIT 67 TAXMAN 346. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO RELIE D UPON M/S MILTON GLOBAL LTD. ITA NOS. 3169 & 3170/MUM/2014 4 THE DECISION IN ITO VS WILLIEMAR SCHWABE (I) PVT. L TD. 3 SOT 71 (DEL.) AS WELL AS GULF OIL INDIA LTD. VS ITO 75 ITD 172 (MUM). THE TOTALITY OF FACTS CLEARLY INDICATES THAT NO TAX WAS DEDUCTIBLE, THEREFORE, THE ACTION U/S 201(1) AND 20 1(1A), TAKEN BY THE ASSESSING OFFICER WAS NOT WARRANTED, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE CONCLUSIO N DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). TH E APPEALS OF THE REVENUE ARE, THEREFORE, DISMISSED. FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 28/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 06/11/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.