Oriflame India Private Ltd., New Delhi vs Assessee

Assistant Commissioner of Vs. M/s Oriflame India Pvt.Ltd., Income Tax, L-29- 29-34, Ist Floor Radial- Radial-6, Circle- Circle-5(1), Outer Circle, New Delhi. Delhi. Connaught Place, New Delhi. TAN : DELO00843D.

(Appellant) (Respondent)

Cross Objection No.179/Del/2012 No.179/Del/2012 Assessment Year : 2005- 2005-06

M/s Oriflame India Pvt.Ltd., Pvt.Ltd., Vs. Assistant Commissioner of L-29 to L- L-34, Ist Floor, Income Tax, Radial- Radial-6, Outer Circle, Circle- Circle-5(1), Connaught Place, New Delhi. New Delhi - 110 001. TAN : DELO00843D.

(Appellant) (Respondent)

Revenue by : Shri P. Dam Kanunjha, Sr.DR. Assessee by : None.

Date of hearing : 16.03.2015 Date of pronouncement : 01.04.2015

ORDER

PER G.C. GUPTA, GUPTA, VP :

The appeal by the Revenue and the cross-objection by the assessee for the assessment year 2005-06 are directed against the

2 ITA-1411/D/2012 & C.O.179/D/2012

order of learned CIT(A)-XXX, New Delhi dated 24th January, 2012. At the time of hearing, none appeared on behalf of the assessee and therefore, the appeal of the Revenue and the cross-objection of the assessee are being decided ex parte qua the assessee on merits after hearing the learned DR.

ITA No.1411/Del/2012 - Revenue's appeal :- :-

2. The grounds of appeal of the Revenue are as under:-

"(1) On the facts and in the circumstances of the case as well as in law, the ld.CIT(A) has erred -

(a) in deleting the penalty levied u/s 271C of the I.T. Act, 1961 amounting to Rs.11,25,794/- being 100% of tax not deducted by the assessee on contract payment made to M/s Silver Oak Lab (P) Ltd.

(b) in not appreciating the observation of the Add. CIT as to how the decision of Hon'ble Supreme Court in the case of Silver Oak Laboratories Ltd. would support the case of the deductor company as nothing was brought on record neither during the penalty proceedings nor the appellate proceedings to prove that both the transaction i.e. payment made by the deductor company to Silver Oak and the payment made by M/s Silver Oak to others are alike."

3. Learned DR submitted that the assessee has failed to deduct TDS on contract payment made to M/s Silver Oak Laboratories (P) Ltd. He relied on the order of the Assessing Officer.

4. We have considered the submissions made by learned DR and have perused the order of the Assessing Officer and the CIT(A). We find that learned CIT(A) has recorded a finding that the provision of 3 ITA-1411/D/2012 & C.O.179/D/2012

TDS under Section 194C was not applicable to the assessee's case on purchase of material and, therefore, penalty under Section 271C of the Income-tax Act, 1961 could not be imposed on the assessee. We find that the assessee is in the business of selling of cosmetics after getting them manufactured from M/s Silver Oak Laboratories (P) Ltd. The TDS provisions of Section 194C(1) explanation (iv) define that "work" shall include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer and further explain that it does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer. It is not the case of the Department that the material was purchased by the assessee from such customer and, therefore, we hold that there is no mistake in the order of the learned CIT(A) in holding that the provision of Section 194C does not apply to the case of the assessee being purchase of material. Accordingly, the order of learned CIT(A) on this issue is confirmed and the grounds of appeal of the Revenue are rejected.

Assessee's cross-

cross-objection No.179/Del/2012 :-

:-

5. The only ground of the cross-objection of the assessee is as under:-

"On the facts and in the circumstances of the case and in law the Assessing Officer erred in filing an appeal before the Tribunal without appreciating the decision of the CIT(A) in applying the Hon'ble Supreme Court decision vide 18012/2009."

4 ITA-1411/D/2012 & C.O.179/D/2012

6. We find that the ground of the cross-objection is merely supportive of the order of learned CIT(A) and, accordingly, the same is dismissed.

7. In the result, the appeal of the Revenue and the cross-objection of the assessee are dismissed.

Decision pronounced in the open Court on 1st April, 2015.

Sd/- Sd/- (T.S. KAPOOR) KAPOOR) (G.C. (G.C. GUPTA) GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT

VK.

Copy forwarded to: -

1. Revenue : Assistant Commissioner of Income Income Tax, Circle- Circle-5(1), New Delhi.

2. Assessee : M/s Oriflame India Pvt.Ltd., L-29 to L- L-34, Ist Floor, Radial- Radial-6, Outer Circle,

Connaught Place, New Delhi - 110 001.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar