THE COMMISSIONER OF INCOME TAX vs. BISLERI INTERNATIONAL P.LTD.

IN THE HIGH COURT OF DELHI AT NEW DELHI . 26.03.2009 Present: Ms Rashmi Chopra, Advocate for the Appellant. + ITA 153/2009 . The Assessee is the manufacturer of mineral water and is getting the work of printing of packing material done from outside. The manufacture of mineral water is also outsourced by the Assessee. The Assessing Authority held that the Assessee was required to deduct tax at source in respect of payments made for the aforesaid work to the third parties in accordance with the provisions of Section 194 C of the Income Tax Act, 1961 (hereinafter called the ?Act?). Appeal filed by the Assessee was allowed by CIT(A) holding that the transaction in question does not fall within the ambit of the expression works contract but that the real nature of transaction was that of sale/purchase. This Order has been affirmed by the Income Tax Appellate Tribunal. Ms Rashmi Chopra, learned counsel for the Appellant, submits that following two substantial questions of law arise for the consideration of this Court:- . . ?(a) Whether on the facts and in the circumstances of the case, the learned ITAT erred in holding that the payments made for supply of printed packing material as per specification is not a work contract, thus not liable for tax deduction at source under Section 194C of the Income Tax Act, 1961? (b) Whether on the facts and in the circumstances of the case, the learned ITAT erred in holding that the payments made for outsourcing as per its specifications requiring confidence and secrecy is not liable for deduction of tax at source?? . Learned counsel for the Appellant has accepted that so far as the first question is concerned the same stands decided against the Revenue by a decision of this Court in the case of Commissioner of Income Tax ?vs- Dabur India Ltd., [2006] 283 ITR 197. In support of second question submission was that it is wrongly framed and the order of the Tribunal is challenged on the ground that no finding is returned in respect of manufacture of outsourced mineral water even though such a question was specifically framed. However, she could not dispute that even in the case of outsourcing, this Court in Commissioner of Income Tax ?vs- Reebok India Co., [2008] 306 ITR 134 has taken the view that such a contract would not be in the nature of a works contract but sales/purchase transaction. Therefore, no substantial question of law arises for our consideration. The Appeal is accordingly dismissed. . . . A.K. SIKRI, J. . . . . RAJIV SHAKDHER, J. . MARCH 26, 2009/nt . . 4