TMI Blog2013 (10) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... l from other source and has supplied the same to the assessee. May be, in the instant case, some of the features of works contract may overlap, but, however, that should not have been taken as necessary criteria to determine the nature of work. The Explanation "works contract" has a definite legal connotation. What is stated in the section 194C (1) is for "carrying out any works" between the contractor and specified person. The work is also defined to exclude the situation where the material is not supplied by the assessee. In view of the specific definition of work, it is to be held that contract amounts to sale and not works contract. - Decided against the Revenue. - I.T.A. Nos. 1425 of 2006 c/w 1426, 1427, 1428 & 1429 of 2006 - - - Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion amounts to "works contract" or "sale". 4. The counsel for the appellants also referred to Circular No. 715, dated August 8, 1995 (see [1995] 215 ITR (St.) 12), issued by the Central Board of Direct Taxes (CBDT) wherein the question No. 15 is answered which reads as follows : "Question 15 : Whether section 194C would apply in respect of supply of printed material as per the prescribed specifications ? Answer : Yes." 5. On the basis of the said material, it is contended that the contract is a "works contract" because the materials supplied by the tenderer could not have been sold to any others in the open market, the product being customised, according to the specifications of the assessee, the contract amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using material purchased from a person, other than such customer." 7. Section 194C makes it mandatory on the person who make the payment to any resident for carrying out any works to deduct TDS. The definition of work under section 194C excludes the liability of TDS when work involves the manufacture and supply of goods where the material is not supplied by the customers. The contractor secured the material from some other source. The TDS becomes enforceable when such material is supplied by the customer (assessee). 8. In the instant case, for purchase of sachets of particular specification, the tenders were called, the successful tenderers has supplied the sachets according to the specification which amounts to sale and does not come w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milnadu v. Anandam Viswanathan [1989] 73 STC 1 (SC), would become relevant for consideration and it amounts to "works contract". 10. Upon a thoughtful consideration of the submissions made at the Bar, we find this court in KPTCL's case has held that the amendment to the definition of "work" under section 194C(7)(iv) of the Act is clarificatory in nature and retrospective. In the light of the said ratio, if the facts of this case are read, the assessee has not supplied any material. However, the tenderer has secured the material from other source and has supplied the same to the assessee. May be, in the instant case, some of the features of works contract may overlap, but, however, that should not have been taken as necessary criteria to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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