Hindustan Coca Cola Beverage Pvt. Ltd Vs CIT (Supreme Court of India)
Hindustan Coca Cola Beverage Pvt. Ltd. (“the appellant”) filed an appeal before the Supreme Court against the Delhi High Court judgment dated 11.10.2006 in ITA No. 478 of 2005. The appellant, engaged in the manufacture and sale of soft drinks, had entered into an agreement with M/s Pradeep Oil Corporation to use their premises for receipt, storage, and dispatch of goods. The appellant paid warehousing charges to Pradeep Oil Corporation and deducted tax at source under Section 194C of the Income Tax Act, 1961 (“the Act”) at 2%. The Assessing Officer, however, held the appellant to be an “assessee in default” for failing to deduct tax under Section 194-I at 20%, treating the warehousing charges as rent, and levied interest under Section 201(1A) on the shortfall.
The appellant’s appeal before the Commissioner of Income Tax (Appeals) and the Tribunal was dismissed, and the High Court upheld the decision on 21.5.2004. The appellant later filed a miscellaneous application for rectification of the Tribunal order dated 12.7.2002, contending that its alternative argument—that Pradeep Oil Corporation had already paid tax on the warehousing income—was not considered. The Tribunal, after hearing the application, recalled its earlier order to address Ground No. 7 of the memorandum of appeal, which raised the issue that since the recipient had paid tax, no further recovery should be made from the appellant. This order was not challenged by the department.
