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2023 (11) TMI 586 - AT - Income TaxTDS u/s 194C - works contract - purchase of packing materials - assessee in default for non-TDS u/s 201(1) - HELD THAT:- The assessee made purchase of the printed packing materials from six parties as mentioned in the assessment order. It is not a case of the Revenue that assessee’s own material given to the suppliers for getting any particular work or a job or printing done from them. Further there is no agreement between the assessee and suppliers of goods as being in the nature of job work. Thus it is not a works contract, but it is an outright purchase which is not hit by Section 194C of the Act. The entire material of flexi packaging were purchased by the suppliers on their own and paid Excise Duty and VAT. The assessee submitted sample bills from each of the suppliers, wherein the above facts are proved which is not disputed by the Assessing Officer. Further the above issue was considered in the case of Girnar Food [2006 (2) TMI 160 - GUJARAT HIGH COURT] and clearly held that it is a case of sale and not “works contract” and section 194C will not be applicable. Respectfully following the above decision, Ground No. 1 raised by the Revenue is devoid of merits and the same is hereby dismissed. Discounts given by the assessee is to be treated in the nature of commission u/s 194H - HELD THAT:- Plain reading of the definition of section 194H makes it clear that the said section applies only if the nature of the payment is for acting on behalf of another person or for rendering of services. However, in the case of the assessee, the discounts were allowed to assessee's own buyers/parties to whom goods are sold. None of the parties were assessee's agents and none of them had rendered any services to the assessee. For buying goods from the assessee, they paid sales consideration. They had also not sold the goods supplied to them on behalf of assessee, but they had sold the same in their own rights as independent parties. Thus, all the 12 parties were not the agents and had not rendered any services to the assessee, therefore section 194H does not apply in the present case. As seen that all the credit notes are by way of sales price difference allowed to said parties for specific reasons as stated therein. The said credit notes therefore rightly would reduce the gross sale consideration charged at the time of raising the original invoices and supplying of the goods to them. All the said 12 parties were the buyers/customers of the assessee. Therefore, the provision of section 194H would not apply in the above transaction. The said issue is squarely covered in favour of the assessee as relying on case of M/s. Gujarat Narmada Valley Fertilizer and Chemicals Ltd. [2019 (4) TMI 1723 - GUJARAT HIGH COURT] - Thus we do not find any merits in the ground no. 2 raised by the Revenue and the same is hereby rejected. Charging of interest u/s. 201(1A) of the Act which is consequential of non-deduction of TDS to be set aside - Revenue appeal dismissed.
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