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2015 (9) TMI 1489 - HC - Income TaxTDS u/s 194C - payment made against the supply of materials included in composite contracts for executing Turnkey Projects - Held that:- As from clause 3.5 of the contract agreement, made it clear that there were three separate contracts entered into, but all the separate contracts were integral parts of a composite contract on single sale responsible basis. The invoices raised on the basis of the said composite contract separately mentioning the value of the material supplied, no deduction was permissible under section 194C of the Act. The said provision could not be pressed into service to deduct tax at source. The whole object of introduction of that section was to deduct tax in respect of payments made for works contracts. No division was, therefore, permissible in respect of a contract for supply of materials for carrying out the work as in case of distinct contracts. The contract for supply of material being a separate and distinct contract, no division was permissible under section 194C of the Act. Section 194C was amended with effect from October 1, 2009 and the provision is unambiguous. Therefore, it was concluded by this court that if a person executing the work, purchases the materials from a person other than the customer, the same would not fall within the definition of "work" under section 194C of the Act. Provisions of section 194J or section 194C - payments made by an assessee towards bill management services - Held that:- The services rendered by the agencies engaged by the assessee at several places are not professional services, and, therefore, section 194J was not attracted. The demand towards the alleged short deduction of tax deducted at source and interest, was hence improper and the contract was rightly held to be a service contract by the Tribunal. This court had affirmed that it was a contract, which should be covered under section 194C of the Act.
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