JUDGMENT

B.SUDERSHAN REDDY, J.—

1.Leave granted.

2.This appeal by Special Leave preferred by the appellant-assessee is directed against the judgment of Delhi High Court dated 11.10.2006 in ITA No. 478 of 2005.

3.Briefly stated the facts are as follows :

4.The appellant-assessee is engaged in the manufacture and sale of soft drinks. The appellant- assessee entered into an agreement with M/s. Pradeep Oil Corporation for use of their premises for receipt, storage and dispatch of goods belonging to the appellant-company. There is no dispute that the appellant had paid the warehousing charges to M/s. Pradeep Oil Corporation on which tax was deducted under Section 194C of the Income Tax Act, 1961 (for short ‘the Act’) @ 2%. The Assessing Officer vide order dated 30.3.2001 held the appellant to be ‘assessee in default’ for failure to deduct tax at source in respect of warehousing charges paid to M/s. Pradeep Oil Corporation. The Assessing Officer rejected the plea of the assessee that the payments made by the appellant-company were in the nature of contractual payments on which tax was deducted under Section 194C of the Act at 2%. The Assessing Officer accordingly held that the warehousin