ITO (TDS), New Delhi v. M/s Kuber Khaini (P) Ltd., New Delhi

ITA 155/DEL/2011 | 2007-2008
Pronouncement Date: 29-07-2011 | Result: Dismissed

Appeal Details

RSA Number 15520114 RSA 2011
Bench Delhi
Appeal Number ITA 155/DEL/2011
Duration Of Justice 6 month(s) 18 day(s)
Appellant ITO (TDS), New Delhi
Respondent M/s Kuber Khaini (P) Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 29-07-2011
Date Of Final Hearing 29-06-2011
Next Hearing Date 29-06-2011
Assessment Year 2007-2008
Appeal Filed On 11-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: I NEW DELHI BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI B.K. HALDAR ACCOUNTANT MEMBER ITA NO: 155/DEL/2011 A.Y. : 2006-2007 & 2007-2008 ITO W-50(3) VS. M/S KUBER KHAINI PVT.LTD. NEW DELHI 32 K SIRASPUR G.T.KARNAL ROAD NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : MS. SURJANI MOHANTY SR.D.R. RESPONDENT BY : SH. AJAY VOHRA ADV. & SHRI AVDHESH B ANSAL C.A. O R D E R PER DIVA SINGH JUDICIAL MEMBER THIS IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 1.11.10 OF CIT(A)-XXX NEW DELHI PERTAINING TO F .Y. 2005-06 AND 2006-07. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E IN THE APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD.CIT(A) ERRED HOLDING THAT THERE IS NO TDS ON PAYMENT FOR P URCHASE OF RAW MATERIAL/PACKING MATERIALS AS SALE OF A GOOD A CT IS APPLICABLE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD.CIT(A) ERRED IN DIRECTING THE A.O. TO REFUND THE TDS AMOUN T WITH INTEREST IGNORING THE FACT ON RECORD THAT DURING TH E SURVEY PROCEEDINGS THE ASSESSEE ITSELF ADMITTED ITS DEFAUL T FOR NON- DEDUCTION OF TDS U/S 194C ON THE PAYMENT MADE TO OT HER ITA 155/DELHI/2011 PAG E 2 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI COMPANIES FOR PURCHASE OF PRINTING PLASTIC POUCHES PACKING MATERIALS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD.CIT(A) ERRED IN OBSERVING THAT THE A.O. SHOULD NOT REPEAT SUCH MISTAKE IN FUTURE WITHOUT GOING THROUGH THE DETAILE D FINDINGS RECORDED BY THE A.O. IN ORDER U/S 201(1)/201(1A) HO LDING THAT THE ASSESSEE DEDUCTOR WAS LIABLE FOR DEDUCTION OF T DS ON THE PAYMENTS MADE FOR PURCHASE OF PRINTING PLASTIC POUC HES FROM THE PARTIES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D.CIT(A) ERRED IN NOT CONSIDERING THE BOARD CIRCULAR NO.715 DT. 18.8.95 WHEREIN IT HAS BEEN CLARIFIED THAT TDS U/S 194C IS APPLICABLE ON THE PAYMENTS FOR PURCHASE OF PACKING/PRINTED MAT ERIALS. 3. THE SHORT ISSUE WHICH FALLS FOR OUR CONSIDERATIO N IN THE DEPARTMENTAL APPEAL IS WHETHER PAYMENT RECEIVED FOR PRINTING ON THE POUCHES THE NAME LOGO CONTENTS WEIGHT ETC. AS PE R ASSESSEES SPECIFICATIONS WOULD AMOUNT TO CONTRACT OF SALE AND THUS OUTSIDE THE AMBIT OF S.194C OR WOULD THIS ACTIVELY BE CONSIDERE D AS A CONTRACT OF WORK FOR WHICH TAX DEDUCTION AT SOURCE WAS NECESSA RY. A PERUSAL OF THE RECORD SHOWS THAT THE ASSESSEE COMPANY IS A MANUFAC TURER OF TOBACCO KHAINI AND WAS INCORPORATED IN 1999-2000. THE ASSE SSEE WAS SUBJECTED TO A SURVEY U/S 133A OF THE INCOME TAX ACT 1961 O N 22.2.2007. THE SURVEY AS PER RECORD WAS CONDUCTED IN ORDER TO VER IFY THE ASSESSEE COMPANYS COMPLIANCE WITH REGARD TO THE PROVISIONS OF CHAPTER XVII OF THE INCOME TAX ACT 1961. ITA 155/DELHI/2011 PAG E 3 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI 4. AS PER THE ORDER OF THE ITO TDS SPOT VERIFICAT ION SHOWED THAT ASSESSEES TDS PAYMENTS WERE INCOMPATIBLE WITH ASSE SSEES TURNOVER. FURTHER THE EXAMINATION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE REVEALED THAT THE ASSESSEE COMPANY WAS NOT DEDUCTIN G TDS ON THE PURCHASE OF PRINTING PLASTIC VOUCHERS AS PER ITS OW N SPECIFICATIONS FOR F.Y. 2005-06 AND 2006-07. THE TDS LIABILITY ON TH IS INCLUDING INTEREST U/S 201(1A) WORKED OUT TO RS. 4 61 380/-. THE ASSE SSEE FURNISHED CHEQUE OF THE SAID AMOUNT. HOWEVER IN THE POST S URVEY PROCEEDINGS THE ASSESSEE DISPUTED THE APPLICABILITY OF S.194C ON TH E PURCHASE OF THE PRINTING MATERIAL ON THE GROUNDS OF IT BEING A CON TRACT FOR SALE AND NOT A CONTRACT FOR WORK. THE ASSESSEE THROUGH ITS A.R . FILED COPIES OF CBDT CIRCULAR NO. 13/2006 DT. 13.12.2006 AND ALSO THE DECISION OF THE HONBLE BOMBAY HIGH COURT AURANGABAD BENCH IN THE CASE OF M/S BDA LTD. VS ITO (TDS) 153 TAXMAN 386 (2006). 4.1. CONSIDERING THE SUBMISSIONS THE ITO TDS WAS OF THE VIEW THAT PRIOR TO CIRCULAR NO. 13/2006 DT. 13.12.2006 THE CBDT HAS ISSUED CIRCULAR NO. 715 AND 681 DT. 10.8.95 AND 8.3.94 AND THE TWO CONTRADICTED EACH OTHER ON THE ISSUE OF APPLICABILI TY OF S.194C. HE WAS OF THE VIEW THAT WHEREAS CIRCULAR NO. 715 ANSWERS IN THE AFFIRMATIVE ABOUT THE APPLICABILITY OF SECTION 194C IN RESPECT OF SUPPLY OF PRINTING MATERIAL AS PER PRESCRIBED SPECIFICATIONS CIRCULA R NO.681 DT. 8.3.94 CONTRADICTS IT. IN THIS BACKGROUND IN ORDER TO REM OVE THE AMBIGUITY THE CBDT ISSUED ANOTHER CIRCULAR NO. 13/2006 AS SUCH IT WAS CONSIDERED TO ITA 155/DELHI/2011 PAG E 4 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI BE OF NO HELP TO THE ASSESSEE AS IT IS MERELY DIRE CTED THAT THE CONTENTS OF EACH CONTRACT ARE TO BE EXAMINED INDIVIDUALLY SO AS TO DETERMINE WHETHER IT IS A CONTRACT OF SALE OR CONTRACT FOR WORK. ACCORDINGLY HE CONCLUDED AS UNDER. THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON REC ORD TO CONCLUDE THAT THE PURCHASE OF PACKAGING MATERIAL AS PER ITS OWN SPECIFICATION WAS NOT A CONTRACT FOR WORK. THE SAMPLE OF THE PACKAGING MATERIAL OBTAINED DURING THE SURVEY PROCEEDINGS BEARS THE LOGO OF THE ASSESSEE COMPANY APART FROM THE NET WEIGHT CONTENTS AND INGREDIENTS WHIC H MEANS THAT THE PACKING POUCHES WERE PARTICULARLY MADE FOR THE ASSESSEE COMPANY AND COULD NOT HAVE BEEN USED FOR A NY OTHER CONCERN. THIS CLEARLY INDICATES THAT ASSESSE E COMPANYS PAYMENTS FOR THE PURCHASE OF PACKAGING MATERIAL WER E COVERED U/S 194-C. AS FAR AS THE ASSESEES RELIANC E UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF BDA LTD. IS CONCERNED IT IS STATED WITH DUE DEFERE NCE THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAME AND A SPECIAL LEAVE PETITION FILED BEFORE THE HONBLE SUPREME COURT WHI CH IS PENDING ADJUDICATION. IN VIEW OF THE ABOVE THE ASS ESSEE IS HELD TO BE A DEFAULTER IN TERMS OF THE PROVISION OF SECTION 194- C FOR NOT DEDUCTING TDS ON ITS PAYMENTS TOWARDS THE PURCHASE OF PACKAGING/PRINTED MATERIAL AS PER ITS O WN SPECIFICATIONS. PENALTY PROCEEDINGS U/S 271-C ARE BEING REFERRED SEPARATELY TO THE ACIT RANGE 50 NEW DELH I FOR THE ABOVE SAID DEFAULT. WITH THESE REMARKS THE TOTAL TAX LIABILITY OF THE ASSESSEE COMPANY IS WORKED OUT AS UNDER. F.Y. 2005 - 06 TDS AMOUNT INTEREST U/S 201(1A) RS. 196540/ - RS. 30929/- F.Y. 2006 - 07 TDS AMOUNT INTEREST U/S 201(1A) RS. 223783/ - RS. 10136/- T O T A L : LESS: PAID RS. 461388/ - RS. 461389/- BALANCE TAX LIABILITY N I L N I L ITA 155/DELHI/2011 PAG E 5 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI 5. AGGRIEVED BY THIS THE ASSESSEE WENT IN APPEAL B EFORE THE CIT(A). 6. BEFORE THE CIT(A) IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE ASSESSEE COMPANY IS A MANUFACTURER OF CHEWING TOBACCO WHICH IS PACKED IN SMALL AND BIG POUCHES DEPENDING UPON THE SALE PRICE OF THE POUCH. THE COMPANY PURCHASES PACKING MATERIAL I.E. SMALL POUCH BIG POUCH OUTER POUCHES AND BOXES ETC. FROM THE COMPAN IES AND PERSONS WHO DEAL IN THE MANUFACTURING OF THE LAMINATED ARTI CLES ETC. THE COMPANY PURCHASED MATERIALS AS PER THEIR OWN SPECIF ICATIONS. IT WAS SUBMITTED THAT THE LIABILITY OF THE PAYMENT ARISES ON RECEIVING THE MATERIAL BY THE COMPANY AND THE COMPANY PAID SALES TAX CENTRAL SALES TAX AS APPLICABLE TO THE ITEMS. 7. IT WAS SUBMITTED THAT THE PROVISIONS OF S.194C( IV) WILL NOT COVER CONTRACTS FOR SALE OF GOODS. IT WAS SUBMITTED THAT WHERE THE CONTRACTOR UNDERTAKES TO SUPPLY ANY ARTICLE OR THING FABRICATE D ACCORDING TO THE SPECIFICATIONS GIVEN BY THE GOVERNMENT OR ANY OTHER SPECIFIED PERSON AND THE PROPERTY IN SUCH ARTICLE OR THING PASSES TO THE GOVERNMENT OR SUCH PERSON ONLY AFTER SUCH ARTICLE OR THING IS DELIVERE D THE CONTRACT WILL BE A CONTRACT FOR SALE AND AS SUCH OUTSIDE THE PURVIEW O F THIS SECTION. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CAS E IT WAS SUBMITTED THAT IT WAS A CASE OF CONTRACT FOR SALE. 8. RELIANCE WAS PLACED UPON THE ORDER OF THE COORDI NATE BENCH OF THE TRIBUNAL IN THE CASE OF BALSARA HOME PRODUCTS LTD. VS ITO 94 TTJ 970 (AHMD.). IT WAS SUBMITTED THAT THE ISSUE BEFORE TH E AHMEDABAD BENCH OF ITA 155/DELHI/2011 PAG E 6 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI THE TRIBUNAL WAS THE APPLICABILITY OR OTHERWISE OF SECTION 194C TO PURCHASE OF PRE PRINTED PACKING MATERIALS LIKE TUBE S CARTONS CORRUGATED BOXES ETC. THE A.O. THEREIN HAD BEEN OF THE VIEW THAT PRINTING MATERIAL SPECIFICATIONS SETTLED BY THE ASSESSEE INVOLVES CO NTRACT OF WORK LIABLE TO TDS U/S 194C. THE TRIBUNAL DID NOT ACCEPT THIS VIE W AND FOLLOWED BOMBAY HIGH COURTS DECISION IN THE CASE OF BDA LTD . VS. ITO (TDS) (2006) 281 ITR 99 DT. 8.3.2004 AND THUS HELD THAT THIS WAS A TRANSACTION OF CONTRACT FOR SALE NOT LIABLE TO TDS U/S 194C. IT WAS STATED THAT IT HAD BEEN HELD THAT THE PRINTING ON T HE MATERIAL IS INCIDENTAL TO SUPPLY OF MATERIAL I.E. THE SALE OF M ATERIAL. 8.1. BEFORE THE CIT(A) RELIANCE WAS ALSO PLACED UP ON THE JUDGEMENT OF THE BOMBAY HIGH COURT IN THE CASE OF BDA LTD. VS. I TO 261 ITR 99. 9. ON FACTS IT WAS ARGUED THAT THE ASSESSEES COMPA NY PURCHASED PRINTED PACKAGING MATERIAL AS PER ITS SPECIFICATIO NS FROM THE INDEPENDENT PARTIES. BEFORE THE PURCHASE OF THE GO ODS THE PROPERTY IN THE GOODS DID NOT BELONG TO THE ASSESSEE. ONLY AF TER DELIVERY THE RIGHT TO USE COMES INTO OPERATION AND THE PROPERTY PASSES T O THE ASSESSEE. IT WAS CONTENDED THAT THE MANUFACTURERS/SUPPLIERS W ERE INDEPENDENT ENTITIES MANUFACTURING THE ARTICLES. ACCORDINGLY IT WAS A CLEAR CONTRACT FOR SALE AND NOT A CONTRACT FOR WORK ON WHICH IT W AS STATED NO TDS IS DEDUCTIBLE. 10. CONSIDERING THESE SUBMISSIONS THE CIT(A) HELD T HAT THERE IS NO NEED FOR TDS ON PAYMENTS FOR PURCHASE OF RAW MATERI ALS/PACKING ITA 155/DELHI/2011 PAG E 7 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI MATERIALS SALE OF GOODS ACT IS APPLICABLE. THE A.O. WAS DIRECTED TO REFUND THE TDS AMOUNT WITH INTEREST AS PER LAW. 11. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFO RE THE TRIBUNAL. 12. LD.D.R. RELYING UPON THE ORDER OF THE ITO SUBMI TTED THAT THESE POUCHES WERE PRINTED SPECIFICALLY AT THE BEHEST OF THE ASSESSEE MENTIONING THEREIN THE CONTENTS WEIGHT AND PRICE E TC. AS PER ASSESEES SPECIFICATIONS. AS SUCH THIS WAS A CASE OF CONTRAC T FOR WORK. MERELY BECAUSE THE SALE OF THESE POUCHES WAS SUBJECTED TO SALES TAX ETC. IT DOES NOT MAKE IT A CONTRACT FOR SALE AND THE SAME HAS TO BE CONSIDERED TO BE CONTRACT FOR WORK. 13. LD.A.R. ON THE OTHER HAND APART FROM RELYING UP ON THE IMPUGNED ORDER AND THE JUDGEMENTS RELIED UPON BY THE ASSESSE E BEFORE THE CIT(A) SUBMITTED THAT THE ISSUE IS NO LONGER RES INTEGRA AND THE SAME IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF A PL ETHORA OF JUDGEMENTS. SPECIFIC ATTENTION WAS INVITED TO THE JUDGEMENTS O F JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DABUR INDIA LTD. 238 ITR 197 REFERRED TO IN THE PAPER BOOK AT PAGES 7 AND 8. ATTENTION WAS ALS O INVITED TO ANOTHER DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. REEBOK INDIA CO. 306 ITR 197 AT PAGES 9 AND 10 OF THE PAP ER BOOK. RELIANCE WAS ALSO PLACED UPON PAPER BOOK PAGES 5 TO 6 WHICH CONTAIN A COPY OF THE JUDGEMENTS AGAIN OF THE JURISDICTIONAL HIGH COU RTS IN CIT VS SEAGRAM MANUFACTURING P.LTD. (DEL) 221 CTR 509. IN THE SAID BACKGROUND IT IS SUBMITTED THAT THEIR LORDSHIPS OF APEX COURT IN CIT VS. ITA 155/DELHI/2011 PAG E 8 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI SILVER OAK LABORATORIES P.LTD. (S.C) HAD AN OCCASI ON TO CONSIDER THE SAID ISSUE WHEREIN A BATCH OF SPECIAL LEAVE PETITIONS AG AINST DIFFERENT ORDERS OF DIFFERENT COURTS WHEREIN THE SLPS FILED BY THE DEPARTMENT HAD BEEN DISMISSED. SPECIFIC ATTENTION WAS INVITED TO THE O RDER OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. DR.WIL LMAR SCHWABE INDIA P.LTD. 95 TTJ 53 COPIES PLACED AT PAGES 55 WHERE TH E ISSUE HAD BEEN CONSIDERED IN LINE WITH THE VIEW TAKEN BY THEIR JUR ISDICTIONAL HIGH COURTS THE TRIBUNAL HAD THEREIN IN A SIMILAR ACTIVITY HELD IT TO BE A CONTRACT OF SALE OF GOODS AND A STATEMENTAT-BAR WAS MADE STAT ING THAT THE SAID VIEW OF THE TRIBUNAL HAD BEEN UPHELD BY THE JURISDI CTIONAL HIGH COURT. AS SUCH IT WAS CONTENDED THAT THE DEPARTMENTAL APPE AL DESERVES TO BE DISMISSED. IT WAS HIS SUBMISSION THAT THE SALES T AX/EXCISE TAX ETC. IS PAID BY THE PARTIES AND IS EVIDENT FROM THE COPIES OF THE RELEVANT INVOICES AVAILABLE ON RECORD. 14. LD.D.R. IN REPLY SUBMITTED THAT AGAINST THE JUD GEMENT OF THE BOMBAY HIGH COURT RELIED UPON BY THE CIT(A) IN THE CASE OF BDA LTD. THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION A ND SLP OR APPEAL HAS BEEN FILED. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD AND THE VARIOUS JUDGEMENTS RELIED UPON. IT IS NECESSARY TO REPRODUCE THE RELEVANT PROVISIONS OF THE ACT OF S.194C WHICH DEALS WITH PAYMENT TO CONTRACTORS READS AS UNDER. HENCE W E ARE CONCERNED WITH EXPLANATION (IV) TO THE SAID SECTION. ITA 155/DELHI/2011 PAG E 9 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI PAYMENT TO CONTRACTORS : 194C. (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTR ACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING O UT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISS UE OF BY A CHEQUE OR DRAFT OR BY ANY OTHER MODE WHICHEVER IS EARLIER D EDUCT AN AMOUNT EQUAL TO- (I) ONE PER CENT WHERE THE PAYMENT IS BEING MADE OR CREDIT IS BEING GIVEN TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY; (II) TWO PER CENT WHERE THE PAYMENT IS BEING MADE OR CREDIT IS BEING GIVEN TO A PERSON OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN. (2) X X X X X (3) X X X X X (4) X X X X X (5) X X X X X (6) X X X X X (7) X X X X X EXPLANATION FOR THE PURPOSE OF THIS SECTION - (I) XXXXXXXXX (II) XXXXXXXXX (III) XXXXXXXXX (IV) WORK SHALL INCLUDE (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C) CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; (D) CATERING ; (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM SUCH CUSTOMER. BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATI ON OF A CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON OTHER THAN SUCH CUSTOMER. ITA 155/DELHI/2011 PAG E 10 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI 16. ON A BARE READING OF THE RELEVANT PROVISION IT IS SEEN THAT THE ASSESSEE FALLS IN EXCEPTION CARVED OUT IN SUB CLAUS E (E) OF CLAUSE (IV) OF THE EXPLANATION TO SECTION 194C. ACCORDINGLY ON A CONSIDERATION OF FACTS EVIDENCES TAKEN INTO CONSIDERATION BY THE AUTHORITI ES JUDICIAL PRONOUNCEMENTS REFERRED TO FOR OUR CONSIDERATION S OME OF WHICH WE PROPOSE TO SPECIFICALLY DISCUSS LATER WE ARE OF TH E VIEW THAT THE DEPARTMENTAL APPEAL DESERVES TO BE DISMISSED. IT I S SEEN THAT THE SAID ISSUE HAS FALLEN FOR CONSIDERATION OF THE JURISDICT IONAL HIGH COURT ON MANY OCCASIONS. THE JURISDICTIONAL HIGH COURT FOR INSTANCE IN THE CASES OF CIT VS DABUR INDIA LTD. (CITED SUPRA) AND CIT V S. REEBOK INDIA (CITED SUPRA) HAS CONSIDERED IDENTICAL ISSUES. IT IS SEEN THAT IN BOTH THE APPEALS THEIR LORDSHIPS HELD THAT THE PAYMENTS FOR CORRUGATED BOXES WITH SPECIFICATIONS AS PER ASSESEES REQUIREMENTS IN THE CASE OF FORMER AND THE SUPPLY OF ITEMS ACCORDING TO THE SPECIFICAT IONS DESIGNS PROVIDED BY THE ASSESSEE WHO WAS ENGAGED IN MAKING OF FOOTWE AR APPAREL ACCESSORIES AND SPORTS GOODS IN THE CASE OF LATTER DID NOT AMOUNT TO CONTRACT FOR WORK AND WAS IN FACT A CONTRACT OF S ALE. IT IS SEEN THAT WHILE UPHOLDING THE ACTION OF THE TRIBUNAL IN DABUR INDIA LTD. THEIR LORDSHIPS OF THE JURISDICTIONAL HIGH COURT HAD AN OCCASION TO CONSIDER THE JUDGEMENT OF THE APEX COURT IN THE CASE OF STA TE OF TAMIL NADU VS. ANANDAMA VISWANATHAN (1989) 73 STC 1 ON WHICH RELIA NCE HAS BEEN PLACED BY THE DEPARTMENT. THEIR LORDSHIPS REJECTED THE DEPARTMENTAL STAND TAKING INTO CONSIDERATION THE FACT THAT IN TH E FACTS OF THAT CASE ITA 155/DELHI/2011 PAG E 11 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI PRINTING OF QUESTION PAPERS AT THE BEHEST OF A UNIV ERSITY OR EDUCATIONAL INSTITUTION WAS CONSIDERED TO BE A DELICATE AND C ONFIDENTIAL TYPE OF WORK AND THE PRICE PAID FOR SUPPLYING SUCH PRINTED QUEST ION PAPERS OR PRINTED MATERIAL ENTAILS PRIMARILY THE CONFIDENCE AND SECON DLY THE SKILL AND TO A VERY SMALL EXTENT THE MATERIAL. IN THE FACTS WHERE CORRUGATED BOXES WERE MADE AT THE SPECIFICATION OF THE ASSESSEE THE NECES SARY DISPLAY ETC. THEIR LORDSHIPS WERE OF THE VIEW THAT IT IS NOBODYS CASE THAT THE PRINTING OF THE LABELS ON THE CORRUGATED BOXES REQUIRE ANY SPECIAL SKILL OR INVOLVE ANY CONFIDENCE OR SECRECY. 17. IT MAY NOT BE OUT OF PLACE HERE TO REFER TO THE ORDER OF THE COORDINATE BENCH IN THE CASE OF ITO VS. DR.WILLMAR SCHWABE INDIA P.LTD. 95 TTJ (DEL) 53: WHEREIN THE COORDINATE BENCH WAS SEIZED OF THE FACTS WHERE THE ASSESSEE WHO WAS A PRIVATE LIMITED COMPA NY ENGAGED IN THE BUSINESS OF MANUFACTURE AND DISTRIBUTION OF HOMEOPA THIC AND HERBAL MEDICINES REQUIRED BOTTLES CAPS LABELS AND OTHER PACKING MATERIALS FOR PACKING OF THE MEDICINES WHICH WERE PURCHASED FRO M VARIOUS SUPPLIERS AS PER ASSESEES OWN SPECIFICATIONS. THE SUPPLIERS WERE FOUND TO BE PAYING EXCISE DUTY AND ALSO SALES TAX. THE TRIBUN AL CONCLUDED THAT THE OWNERSHIP IN THE SAID MATERIAL WAS ENTIRELY WITH TH E CONCERNED MANUFACTURERS TILL ITS SUPPLY TO THE ASSESSEE COMPA NY AND THE CONTRACT BETWEEN THE ASSESSEE COMPANY AND THESE MANUFACTURER S WAS THAT FOR SUPPLY OF MATERIAL AND NOT FOR CARRYING OUT ANY PAR TICULAR WORK AS ITA 155/DELHI/2011 PAG E 12 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI ENVISAGED IN S.194C. AS SUCH THE PROVISIONS OF S.1 94C WERE HELD TO BE NOT ATTRACTED. 18. ACCORDINGLY WE DO NOT FIND ANY MERIT IN THE ARG UMENT OF THE DEPARTMENT WHICH HAS PLACED HEAVY RELIANCE ON THE F ACT THAT THE POUCHES HAVE BEEN PRINTED AS PER THE ASSESEES SPECIFICATIO N AS THE DOCUMENTS AVAILABLE ON RECORD ESTABLISH THAT THE POUCHES BECO ME THE PROPERTY OF THE ASSESSEE ONLY BY VIRTUE OF SALE OF THE SAID GOODS ON WHICH SALES TAX/EXCISE TAX HAS BEEN PAID BY THE PARTIES. THE P ROPERTY HAS PASSED TO THE ASSESSEE BY VIRTUE OF A SALE OF CONTRACT AND AS SUCH OUTSIDE THE PURVIEW OF SEC. 194C. APART FROM RELYING UPON THE DECISIONS DISCUSSED HEREINABOVE WE ALSO DRAW SUPPORT FROM THE JUDGEMENT OF THE BOMBAY HIGH COURT IN THE CASE OF BDL LTD. 281 ITR (1989). ACCORDINGLY FOR THE REASONS GIVEN HEREINABOVE THE DEPARTMENTAL APPEAL I S DISMISSED. 19. IN THE RESULT THE APPEAL FILED BY THE REVEN UE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29 TH JULY 2011. SD/- SD/- (B.K. HALDAR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH JULY 2011 *MANGA ITA 155/DELHI/2011 PAG E 13 OF 13 A.Y. 2006-07 & 2007-08 M/S KUBER KHAINI (P) LTD. NEW DELHI COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CI T(A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR