2015 (4) TMI 1264

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..... planation (iv) to section 194H and Explanation (ii) to section 194I ? (B) Whether on the facts and in the circumstances of the case and in law, in the context of 'Provisions for expenses', the Hon'ble Tribunal has erred in deleting the short / non deduction of tax by holding that in view of disallowances u/s 40(a)(i) / 40(a)(ia), no demand can be raised u/s 201(1) r.w.s. 194C / 194J of the Act? TDS u/s 194C - Purchase of traded goods, purchase of packing material and clinical trials - stand of the Revenue was that these are all works contract and there is a requirement of deduction of tax at source u/s 194C - HELD THAT:- The Pharma company provides the formulation and specifications. The third party then manufactures the .....

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..... s. Megha Sharma i/b PDS Legal ORDER P.C. : 1. This appeal of the Revenue challenges the order passed by the Income Tax Appellate Tribunal in two appeals one of which was filed by the assessee and the other by the Revenue. The order is pronounced on 31st October, 2012 and for the assessment year 2007- 08. 2. After having heard the counsel appearing for both sides, we are of the view that the appeal deserves to be admitted on the following substantial question of law : (A) Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal is justified in accepting the assessee's contention that the amount covered by 'Provision for Expenses' were not .....

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..... , purchase of packing material and clinical trials. The stand of the Revenue was that these are all works contract and there is a requirement of deduction of tax at source. Therefore, section 194C of the Income Tax Act, 1961, was applicable. 5. Precisely this question was considered in Glenkmark by the Division Bench. It dealt with the ambit and scope of this section. The argument and question was dealt with in somewhat similar facts. This was also a case of a Pharma company wherein it had an agreement with a third party for manufacture of certain pharmaceutical products. The Pharma company provides the formulation and specifications. The third party then manufactures the product or goods and affixes thereon the trademark of the a .....

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