TMI Blog2014 (7) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal correctly reversed the order of assessment passed by the Income-tax Officer, as confirmed by the Commissioner of Income-tax (Appeals) & held that section 194C of the Act has no application to the facts of the case. - Decided against revenue. - I.T.T.A.Nos.30 and 50 of 2002 - - - Dated:- 24-7-2014 - SRI L. NARASIMHA REDDY AND SRI CHALLA KODANDA RAM, JJ. For the Appellant : Sri J.V. Prasad For the Respondent : Sri S. Ravi ORDER L. Narasimha Reddy J.- These appeals under section 260A of the Income-tax Act, 1961, are filed by the Income-tax Department, feeling aggrieved by the common order dated November 20, 2000, passed by the Hyderabad Bench B of the Income-tax Appellate Tribunal in I. T. A. Nos. 893 to 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1995-96 to 1997-98. Aggrieved by that order, the respondent filed an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) passed an order, dated October 23, 1998, upholding the order passed by the Income-tax Officer but directing further verification on facts. The respondent filed a further appeal before the Tribunal. Through order under appeal, the Tribunal reversed the order of assessment passed by the Income-tax Officer, as confirmed by the Commissioner of Income-tax (Appeals). It was held that section 194C of the Act has no application to the facts of the case. Sri J. V. Prasad, learned counsel for the appellant, submits that the activity undertaken by the agency that built the bus body i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing money for the work, the respondent did not undertake any activity in the process, much less did it supply the material and the Tribunal has taken the same into account. He has placed reliance upon the judgment of the Supreme Court in Patnaik's case (supra) The respondent has been carrying the activity of purchasing the chassises and getting the bodies of buses, built thereon, for the past several decades. It was only in the year 1998 that the Income-tax Officer examined the matter from the point of view of section 194C of the Act. He took the view that the activity of building the bus body involves the assignment of a works contract or a work entrusted by the respondent, and thereby, the tax at source ought to have been deducted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simple takes place, the purchaser has his own liberty to stipulate the specifications. The goods of a particular description are manufactured as a regular activity but the purchaser has a slightly different specification, depending upon the nature of use. In such cases, necessary alterations are made even while keeping the main substratum, intact. By itself, it does not change the nature of transaction or activity. It continues to be sale of the goods, may be with slight alterations. Therefore, (a) once a finished product of a definite description and shape was brought into existence with the material and expertise of the agency or per son, who undertook the activity, and (b) a fixed price is paid thereon, the activity tends to be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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