TMI Blog2005 (9) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... /2004 have not been adjourned. Therefore, this application stands rejected. ITA Nos. 4939 to 4941/Del/2004 2. The Department has taken a common ground in these appeals, whereby it has been submitted that the learned CIT(A), while deleting the penalty levied as per the order of the AO, has erred in concluding that the transaction between the manufacturers of packaging material and the deductee company are the transactions of sale and purchase on a principal to principal basis and not transactions of contract covered under s. 194C of the IT Act. 3. For convenience, facts are being taken from ITA No. 4939/Del/2004, since the learned CIT(A) has also passed a composite order for all the three cases. The assessee is a private limited comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Wadilal Dairy International Ltd. vs. Asstt. CIT (2001) 70 TTJ (Pune) 77 and that of the Ahmedabad Bench of the Tribunal in the case of Balsara Home Products Ltd. vs. ITO (2005) 94 TTJ (Ahd) 970. 6. In his counter, the learned Departmental Representative has submitted that since the assessee's name is printed which becomes work contract and that supply of material is only incidental and not decisive. 7. In Wadilal Dairy International Ltd., it has been held, that the requirement of s. 194C is that in order to attract the provisions, the assessee should have made payment to a contractor for carrying out any contract, including supply of labour for carrying out any work. The expression "contractor for carrying out any work" implies that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment, is not applicable. In that case, the assessee had entered into contracts with universities and other educational institutions in the country for printing question paper for the said educational institutions. The question was whether taxable turnover of the assessee would include printing and block marking charges or not. Their Lordships of the Hon'ble Supreme Court held, inter alia, that in each case, the nature of the contract and the transaction must be found out; that this is possible only when the intention of the parties is found out. 9. In the case before us, the assessee purchases packing material from independent manufacturers, sells similar materials to other customers also. The manufacturers produce material as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction. The cost of imported raw material for the manufacture of product is a substantial portion of the total value of the product/packaging material sold to the assessee. For most of the packaging material printing is incidental. Many details mentioned in the packaging material are to comply with the statutory requirements under the relevant laws. These requirements are not specific to the assessee, being as per the statutory and industry/regulations. Thus, the transactions between the manufacturers and the assessee are transactions of sale and purchase on a principal to principal basis. The Department has not been able to dislodge the categorical finding of fact recorded by the learned CIT(A). Moreover, it is seen that the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to packaging material, it cannot be said that the learned CIT(A) has erred in ignoring it. 11. In view of the above discussion, we find no merit in the ground raised by the Department. This common ground is, therefore, rejected. ITA Nos. 4944 to 4947/Del/2004: 12. Here too, the learned CIT(A) has disposed of the appeals before him, by a composite order dt. 13th Sept., 2004. 13. The common grounds taken before us by the Department are that the learned CIT(A) has erred: (i) in deleting the demand under s. 201/201(1A) by concluding that the transaction between the manufacturers of packaging material and the deductor company are the transactions of sale and purchase on a principal to principal basis and not the transactions of cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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