IN THE HIGH COURT OF DELHI AT NEW DELHI 
 . 
  26.03.2009 
 Present:       Ms Rashmi Chopra,  Advocate for the Appellant. 
 + ITA 153/2009 
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 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:- 
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 ?(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?? 
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 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. 
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 A.K. SIKRI, J. 
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 RAJIV SHAKDHER, J. 
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 MARCH 26, 2009/nt 
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