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

During hearing of these appeals, Shri Vijay Kumar Soni, ld.DR, advanced his arguments which is identical to the ground raised, whereas, none was present for the assessee in spite of issuance of registered notice, therefore, we have not option to proceed ex-parte, qua the assessee, and tend to dispose off these appeals on the basis of material available on record.

2.1. We have duly considered the submissions of the ld. DR and perused the material available on record. We note that the ld. Assessing Officer found the assessee in default for non-deduction of tax u/s 194C and consequent order u/s 201(1)/201(1A) of the Act. A survey action was carried out at the premises of the assessee u/s 133A on 16/02/2005 to verify whether the assessee has properly complied with the provisions contained in chapter XVIIB of the Act. Statement of Chief Accountant of the assessee company was recorded. The authorized representative of the assessee furnished details called for from time to time. The Assessing Officer held that there was non-deduction of TDS on purchase of packing material amounting to Rs.1,08,90,875/- from various vendors and Rs.1,65,73,913/- on purchase of dies and moulds and further non-deduction of TDS on reimbursement of ware housing charges of Rs. 5,73,168/- 3 M/s Milton Global Ltd. & 3170/Mum/2014 paid to Milton Plastic Ltd., non-deduction of TDS on reimbursement of expenses to Milton Consultancy Services, Milton Plastic Ltd, etc. It was noted by the Assessing Officer that the appellant was purchasing packing material bearing logo and name of the company as per the specifications provided by the assessee as to the type, size, design and logo etc. The claim of the assessee was that the assessee company is purchasing packing material from various suppliers who use their own material and manufacturing process. The suppliers were claimed to be registered 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 not 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 and Whirlpool of India Ltd. 16 SOT 435 (Del.), it was a clear case of their purchases. The assessee also place reliance upon Circular No.13/2006 dated 13/12/2006 of CBDT. We note that in para 3.3 of the impugned order, there is uncontroverted finding that the assessee was purchasing the packing materials from various suppliers as per specifications given by the assessee and these suppliers were using their own material. The ld. Commissioner of Income 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 relied upon 4 M/s Milton Global Ltd. & 3170/Mum/2014 the decision in ITO vs Williemar Schwabe (I) Pvt. ltd. 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 201(1A), taken by the Assessing Officer was not warranted, consequently, we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (Appeals). The appeals of the Revenue are, therefore, dismissed.