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2010 (3) TMI 289 - HC - Income TaxScope of the term “any work” under section 194C – sales of goods versus works contract – The assessee engages in the business of the manufacture and marketing of drugs and pharmaceutical products. During the course of a survey, the assessee was found to be engaged in three kinds of activities involving pharmaceutical products. Firstly, certain products were manufactured by the assessee at its factory. Secondly, the assessee was getting products manufactured from third parties. Thirdly, the assessee had entered into an agreement under which pharmaceutical products were being manufactured by third parties to specifications and standards provided by the assessee under the trade-mark of the assessee. The Assessing Officer required the assessee to explain why it had not deducted tax at source under Section 194C and should not be treated as an assessee in default under Section 201(1). - ITAT observed that that the transactions between the assessee and the manufacturer is a contract for sale of goods and is not in the nature of works contract and, therefore, the provisions of Section 194C are not attracted – Held that: - Revenue was not justified in treating the assessee, as an assessee in default - The contract entered into by the assessee is not a contract for carrying on any work within the meaning of Section 194C. – decided in favor of assessee
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