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Income Tax Officer (OSD) (TDS) -1 (3) , Mumbai Versus DWD Pharmaceuticals Pvt. Ltd.

2016 (2) TMI 350 - ITAT MUMBAI

TDS u/s 194C - whether the assessee is not liable to deduct tax at source u/s 194C in respect of contract manufacturing? - Held that:- In the present case, the assessee has purchased goods manufactured by the third party and payments made towards goods purchased by assessee. In the section 194C, there is no whisper about the goods purchased from other person and TDS is to be deducted on this payment.

The Hon'ble Supreme Court also made clear that for purchasing of goods no TDS is to .....

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ce issue urged in these appeals are common, therefore, these appeals were heard together and for the sake of convenience, are being dispose of by this consolidated order. 2. Since issue and facts for all the appeals are common, for the sake of brevity we are dealing with the appeal pertaining to assessment year 2003-04 to avoid repetition of amount and tax involved. The only issue urged by the revenue is whether ld.CIT(A) was right in law in holding that the assessee is not liable to deduct tax .....

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to show cause as to why the TDS is not deducted from the payments made to the third parties for getting products manufactured by assessee according to assessee's prescription and requirement. During the course of assessment proceedings, the payment made by the assessee is towards "finished goods" and hence, TDS is not deducted. The AO observed that the clause of agreement show the manufacturing contract a s works and hence TDS should be deducted. The assessee explained that it is a .....

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he claim of the assessee. Aggrieved, the assessee filed appeal before the ld.CIT(A). 4. Before the ld.CIT(A), the assessee submitted that it had made payment to purchase goods from the manufactures according to their requirement. The manufacturers have not extended any services to the assessee therefore it is not in violation of provisions of section 194C of the Act. The assessee submitted before the ld. CIT(A) that the recipient of the payment has paid the taxes on its receipts and they have fi .....

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uments and the decision relied upon by the assessee, allowed the claim of the assessee and granted relief. Aggrieved by the decision of the ld. CIT(A), the revenue has filed this appeal before us. 6. We have heard both the parties and perused the record. We find that the assessee has paid a consideration to third parties for getting manufactured goods according to assessee's requirement. While paying, it did not deduct TDS. The revenue invoked the provisions of 194C of the Act and made asses .....

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