A.D. Jain, J.M. - (1.) AN application has been filed in ITA Nos. 4944 to 4947/Del/2004, requesting for adjournment. It has been stated that since the other connected appeals in the case of M/s Millan Dairy Foods, adjournment had been sought, these appeals be also adjourned to be heard along with those cases. The matter of M/s Millan Dairy Foods i.e. ITA Nos. 4939 to 4941/Del/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 Section 194C of the IT Act. 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 company engaged in the business of milk and milk products. It purchases, as packaging material, poly film, tins and containers from various manufacturers/suppliers. It was under the bona fide belief that the purchase of packaging material was purely a purchase contract and that no deduction of tax at source was to be made on payments made against such purchases. During financial year 2003-04, a survey was carried out on the assessee's business premises. It was pointed out to the assessee that payment made against the purchase of packaging material/packing material was allowable for TDS under Section 194C, as such material was in the nature of printed material. The AO treated the assessee as the assessee-in-default and passed orders under Section 201(1)/201(1A). The learned CIT(A) having allowed the assessee's appeals, the Department has filed the present appeals before us.
(3.) BEFORE us, the learned Departmental Representative has submitted that the AO has rightly relied on CBDT Circular No. 715 of 8th Aug., 1995 (1995) 127 CTR (St) 13 with regard to manufacture of packing material. It is submitted that the receipts in question are work contract receipts and Section 194C has rightly been applied.;