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CIT, TDS, Kolkata Versus Khadim Shoes Pvt Ltd.

2015 (4) TMI 629 - CALCUTTA HIGH COURT

TDS u/s 194C - nature of contract - works contract or sale purchase contract - purchase of footwear with logo from the job worker - Tribunal disagreeing with the findings of the First Adjudicating authority that the transaction between the assessee and its supplier was in the nature of work done by the supplier on behalf of the assessee i.e. ‘outsourcing’ and holding that the said transaction was a sale - Held that:- As regards the purchase of footwear without any specified logo i.e. ₹ 38. .....

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by law nor is factually a correct finding. Goods can be sold either by sample or by description or manufactured as per requirement of the buyer. The assessee has purchased the goods and has admittedly paid sales tax, central excise duty and has in its turn availed the benefit of cenvat credit which is inconsistent with a job contract contemplated by section 194C of the Income Tax Act. Section 194C contemplates payment to a contractor for carrying out any work including supply of labour or carry .....

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sed by the assessee has been accepted by the CIT (A). In spite thereof insistence upon bringing the case within Section 194C was an improper exercise of power. - Decied in favour of assessee. - ITA No. 146 of 2007 - Dated:- 8-4-2015 - Girish Chandra Gupta And Arindam Sinha JJ. For the Appellant : Mr.S.N.Dutta,Advocate, Mr.Aniket Mitra,Advocate For the Respondent : Mr. R.Bharadwaj,Advocate ORDER The Court : The subject matter of challenge in this appeal is a judgement dated 12th May, 2006 passed .....

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upplier on behalf of the assessee i.e. outsourcing and without reasons holding that the said transaction was a sale was perverse ? The undisputed facts of the case are that the assessee a well-known merchant in footwear made purchase worth ₹ 46.30 Crores approximately. The purchase and sale transactions were duly offered for taxation. The assessing officer was of the opinion that the purchase for the sum of ₹ 46.30 Crores was, in fact, an outsourcing and therefore, the assessee shoul .....

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seen that out of total purchase of ₹ 46.29 Crores, from about 140 vendors; the purchase of shoes with the logo khadim amounted to ₹ 7.90 crores only and that too from 10 manufacturers as named by the AO in the order sheet recorded on 31.3.2005. This fact is also veriable from the application U/S.154 dated 8.6.2005. As regards the purchase of footwear without any specified logo i.e. ₹ 38.39 crores; (Rs.46.29-Rs.7.90), it is observed that the same was purchase simplicitor i.e. w .....

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goods could be resold by the vendors after removing the logo khadim . To my mind, it was a case of purchase of goods by ordering extra improvement on the goods brought by the vendors for sale to the appellant. I agree that by providing extra improvement, labels, marks, identity on the footwear brought for sale by the vendors to the appellant made them unique and distinct in a way suited to the appellant. It, therefore, amounted to awarding a specific job work to the vendors and could not be term .....

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