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TMI Blog2017 (8) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and sale of goods by the respective manufacturers. No doubt, the manufacturers are obliged to manufacture products as per the specifications and standards provided by the assessee but it is a case where the contractual obligations are entered into on a principal-to-principal basis. The manufacturers buy raw material and packing material at their own cost and as per their requirements and it is the obligation of the manufacturers to deliver the products as per specifications provided by the assessee. Considering the factual matrix, we find no reason to depart from the earlier finding of the Tribunal with regard to similar contracts which have been held not to be in the nature of work contracts. Therefore, in this view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, they have been clubbed, heard together and a consolidated order is being passed for the sake of convenience and brevity. 2. First, we may take up the appeals in ITA Nos.1428 1429/Mum/2016, pertaining to the assessment years 2006-07 and 2007-08, which are directed against a common order dated 07/12/2015 passed by the CIT(A) - 22, Mumbai, which in turn arose from two separate orders dated 28/03/2012 passed by the Assessing Officer under section 271(1)(c) of the Act for assessment year 2006-07 and 2007-08 respectively. 3. In these appeals, the issue relates to the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act amounting to ₹ 68,69,241/- and ₹ 1,02,28,240/- for assessment years 2006-07 and 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were deleted. In view of the aforesaid decision of the Tribunal, the CIT(A) noted that the very foundation for levy of penalty does not remain and, therefore, the penalties levied under section 271(1)(c) of the Act were cancelled. Against such a decision of the CIT(A), Revenue is in appeal before us. 4. At the time of hearing, it was a common point between the parties that the order of the Tribunal dated 30/09/2015 (supra) continues to hold the field as it has not been altered by any higher authority, therefore, in our considered opinion, the CIT(A) made no mistake in deleting the penalty made by the Assessing Officer under section 271(1)(c) of the Act for the assessment years 2006-07 and 2007-08 respectively. Resultantly, the appeals o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such products are sold by the assessee under its own brand name. In this context, the Assessing Officer noted that assessee had entered into agreements with three such manufacturers namely, VVF Ltd., Suhan Cosmotech (India) and Jewel Pharma. From the said parties assessee had purchased goods worth ₹ 97,21,778/-, detailed as under:- (1) VVF Ltd. ₹ 80,45,660/- (2) Suhan Cosmotech (India) ₹ 6,39,028/- (3) Jewel Pharma ₹ 10,37,090/- Total : Rs.97,21,718/- 8. The relevant discussion in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent in the assessee s own case, we have also perused the seminal features of the contract entered into by the assessee with the three concerns for purchase of goods. Such features has been elucidated in the Statement of Facts filed before the CIT(A), and which clearly bring out that the contract for supply of goods is on principal-to-principal basis and is a contract for purchase of goods by the assessee and sale of goods by the respective manufacturers. No doubt, the manufacturers are obliged to manufacture products as per the specifications and standards provided by the assessee but it is a case where the contractual obligations are entered into on a principal-to-principal basis. The manufacturers buy raw material and packing material at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restriction on carry forward of unabsorbed depreciation for 8 years was done away with and the new section 32(2) of the Act only prescribed that depreciation remaining unabsorbed in an assessment year shall be carried forward to the next assessment year and shall form part of the current depreciation. On the strength of this amendment, assessee canvassed that unabsorbed depreciation remaining at the end of assessment year 2001-02 would form part of the depreciation for assessment year 2002-03 and, therefore, it could be carried forward and set-off without any time limit as per the amended provisions of section 32(2) of the Act. Before the CIT(A), assessee also pointed out that the decision of the Special Bench of the Tribunal in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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