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TMI Blog2018 (5) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... al and the assessee’s case is squarely covered by the decision of Chandana Brothers cited (2010 (12) TMI 1293 - ITAT VISAKHAPATNAM) and CIT Vs. Dabur India Limited (2005 (8) TMI 65 - DELHI High Court) and no disallowance is called for u/s 40(a)(ia) of the Act. - Decided in favour of assessee. - I.T.A.Nos.201 to 206/Vizag/2017 - - - Dated:- 9-5-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri S. Ravi Shankar Narayan, DR ORDER PER Bench: These appeals filed by the assessee are directed against orders of the Commissioner of Income Tax (Appeals)-3 {CIT(A)}, Visakhapatnam vide ITA Nos.1 to 6/2015-16/CIT(A)-3/VSP/2016-17 dated 19.1.2017 for the assessment years 2005-06 to 2010-11. 2. For the sake of convenience the facts are extracted from the appeal for the AY 2005-06.The assessee filed the return of income in this case on 16.6.2010 declaring total income of ₹ 81,44,010/-. The assessment was completed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter called as 'the Act') on 27.12.2011 and the total income was determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract cannot be called as works contract. However, the Ld. CIT(A) observed from model boxes that the assessee retained right to return the goods, which is not common in trading. In trading commonly used maxim is goods once sold cannot be taken back, hence, directed the A.O. to disallow 10% on the total value of the goods purchased instead of 25%. 4. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. Appearing for the assessee, the Ld. A.R. argued that in this case, the assessee has purchased packing material and there was no supply contract involved for purchase of the packing material. The fact that the assessee has not supplied any material shows that there is no works contract but there was only contract for sale and argued that contract for sale does not attract the provisions of TDS u/s 194C of the Act. Merely because the supplier has supplied the material with trade name, logo, particulars of product and other information, the same cannot be treated as works contract. The supplier has supplied the material as required by the assessee. Therefore, argued that the assessee s case is squarely covered by circular No.681 of CBDT dated 8.3.1994 and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment year Total expenditure (Rs.) Disallowance by A.O. @ 25% (Rs.) Sustained by CIT(A) @ 10% (Rs.) 2005-06 48,00,125 12,00,031 4,80,012 2006-07 48,11,001 12,02,750 4,81,100 2007-08 78,74,868 19,68,717 7,87,487 2008-09 1,95,87,537 48,96,884 19,58,754 2009-10 1,19,64,518 29,91,129 11,96,452 2010-11 1,58,05,283 39,51,321 15,80,528 7. In this case, the assessee s case is that he has purchased the printing material and there was no element of contract involved. Department s case is that though assessee had purchased the printing material and some part of the packing material involved the works contract, which required to be disallowed u/s 40(a)(ia) of the Act. Both the CIT(A) and the A.O. made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments fall outside purview of Section 194C of the Act. Accordingly he deleted the impugned addition made in all these cases. The learned CIT (A) relied on the decisions of Hon'ble Bombay High Court in the case of BDA Ltd. vs. ITO (TDS) (2006) 281 ITR 99 and the Hon'ble Delhi High Court decision on the case of CIT vs. Dabur India Ltd. (2006) 283 ITR 197. 5. As pointed out by the learned Authorised Representative, this Tribunal has considered an identical issue in the case of M/s Devi Fisheries Ltd., and also in the case of Shri Bommana Ramachandra Rao, wherein this Tribunal has categorically held that the main purpose in buying the packing material was to obtain goods for the purpose of packing and the fact that incidentally some printing was required to be done by the supplier was of no consequence; therefore, the provisions of sec. 194C are not attracted. While arriving at the said decision, the Tribunal has followed the decision of Hon'ble Delhi High Court in the case of M/s Dabur India Ltd (Supra). We notice that the learned CIT (A) also has decided the impugned issue on similar lines and hence we do not find any reason to interfere with his decision. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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