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2012 (2) TMI 52 - KARNATAKA HIGH COURTWork Contract vs Contract for sale – purchase of product - product manufactured out of raw materials supplied by a foreign company who had direct interest in the assessee company - product manufactured to the specification of the assessee utilizing the technical know-how supplied by it - labeling the product with the brand name of the assessee - supplying the entire product only to the assessee and not to anyone else – Held that:-This is not simply a situation of a product manufactured to the specifications of the assessee, being sold to the assessee at the price fixed by the seller but this is to be held as a specific contract for manufacturing of a particular product notwithstanding the fact that the seller had paid the price for the raw-material directly to the foreign company supplying raw material, but had interest in the assessee company in India and having a definite communication. Further, situation contemplated u/s.194C i.e. the payment being carrying out any work which is to improve the situation of such nature and of course preceded between the contract between the assessee and the manufacturer company. Therefore, it is held provisions of Section 194C are applicable to the assessee and is clearly attracted to the present situation – Decided in favor of Revenue.
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