Deduction of income-tax at source-Section 194C of the Income-tax Act, 1961-Payments to contractors and sub-contractors

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..... overnments. Subject: Deduction of income-tax at source-Section 194C of the Income-tax Act, 1961-Payments to contractors and sub-contractors. Sir, Pursuant to the decision of the Supreme Court in Brij Bhushan Lal Parduman Kumar v. CIT [1978] 115 ITR 524, several representations were received seeking modification of para. 1(v) of Board's Circular No.86 (F. No. 275/9/72-ITJ), dated the 29th May, 1 .....

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..... specified person had undertaken to supply all or any of the materials necessary for the work at stipulated price, the deduction would have to be related to the gross payment without excluding the cost of the materials. 3. The decision of the Supreme Court in Brij Bhushan Lal's case is on the manner of computing the income and is not on the interpretation of section 194C of the Income-tax Act. T .....

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..... included in the turnover of the contractor as there was not even a theoretical possibility of any profit being made by the contractor from such stores or materials. This case has no bearing on the facts of the case before us, because under s. 194C(1) deduction has not to be made from profits made by the contractor, but from the total payment made to the contractor for doing any work." 4. In view .....

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