TMI Blog2017 (5) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the requirement and specification of the customer but without seeking supply material from the customers stands excluded from the scope of expression “work” as provided in the aforesaid provision. Circular No.715 dated 08/08/1995 held that where a person had provided only specification for supply of printed material without supply of material do not fall within the ambit of section 194C. See Punjab Tractors Ltd. Versus Income-tax Officer (TDS-II), Chandigarh [2012 (10) TMI 287 - ITAT CHANDIGARH ] We also simultaneously note from the invoices raised by the supplier that the printed packing material so supplied to the assessee are subjected to various taxes viz. excise duty, VAT, and CST on the sale price. Ostensibly, it is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract with the vendor in this case is a contract for work and not a contract for sale as envisioned u/s.194C. 3. The AO is aggrieved by the order of the CIT(A) in granting relief on account of non-deduction of tax on the payment towards supply of printed packing material on the premise that the supply of printed packing material is contract for work and not a contract for sale as envisaged under s.194C of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 4. Briefly stated, the assessee is a partnership-firm engaged in the business of manufacturing of perfume. The assessee filed return of income for the relevant AY 2012-13 which was subjected to scrutiny assessment. In the course of assessment proceedings, a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract for work as alleged. Consequently, it was held by the CIT(A) that provisions of section 194C are not applicable to the said sale transactions. He accordingly held that the action of the AO in disallowing the expenditure incurred by the assessee towards printed packing material amounting to ₹ 3,15,56,185/- for non-deduction of tax at source under s.194C is unsustainable in law and accordingly reversed the action of the AO. 6. The Revenue preferred an appeal against the order of the CIT(A) before the Tribunal. 7. The Ld.DR for the Revenue relied upon the order of the AO. 8. The Ld.AR for the assessee Mr.Mukund Bakshi vociferously supported the order of the CIT(A). 8. We have heard the rival submissions. The central c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract would be under statutory obligation to deduct TDS at a certain percentage of the contract as specified in aforesaid provision. Ostensibly, obligation under s.194-C towards expenditure incurred arises out of carrying out any work . As noted, expression work specifically includes supply of product as per specific requirement of customer however subject to a caveat. The definition work seeks to include only those kinds of supply as per specifications of a customer which are made by using material purchased from such customer. It is undisputed fact in the instant case that the supply of printed packing material is the responsibility and the supplier without involving any cross-supply of raw-material from the assessee. Such phrase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e substituted Explanation by the amendment carried out by the Finance (No.2) Act, 2009, w.e.f. 01/10/2009 as discussed above. We observe that the CIT(A) has dealt that the objections of the Revenue with regard to the aforesaid CBDT Circular in great length and distinguished the situation prevailing in the aforesaid impugned assessment year 2012-13 with reference to several judicial precedents. We also note that the Coordinate Bench of Tribunal in Panjab Contractors Ltd. vs. ITO (TDS) (2012) 26 Taxmann.com 73 (Chd.) after considering Circular No.715 dated 08/08/1995 held that where a person had provided only specification for supply of printed material without supply of material do not fall within the ambit of section 194C. 8.5 We also si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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