TMI Blog2019 (11) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... would apply to a contract for work and not to a contract for sale. The contention of the learned counsel for the Revenue that the Tribunal ought to have restricted its scrutiny with regard to the validity of the order of remand passed by the Commissioner of Income Tax, appears to be attractive at first blush, however, in peculiar facts of the case, we are not inclined to accept the aforesaid submissions as both the authorities on the basis of the materials available on record has recorded the finding in favour of the assessee that the contract in question is a contract for sale and is not a contract for work. Therefore, such an exercise in the fact of the case would be an exercise in futility. We are inclined to answer the additional sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered under the provisions of the Companies Act, 1956. The assessee is engaged in the business of printing and publishing newspapers. The assessee had entered into an agreement for bulk sale of advertising space dated 17.01.2007 with Bennett, Coleman and Co. Ltd. (hereinafter referred to as BCCL for short), the ultimate holding company of the assessee, for purchase of bulk advertisement space in the daily newspaper The Times of India in Kannada language on a principal-to-principal (P2P) basis by transfer of the rights therein. The assessee had incurred an expenditure of ₹ 74,79,452/- for purchase of advertisement space during the year 2006-07. The assessee on 30.10.2007 filed its return of income for the assessment year 2007-08 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equires to be disallowed under Section 40(a)(ia) of the Act. In the notice, it is further stated that the order of assessment dated 22.12.2009 is erroneous and is prejudicial to the interest of the Revenue. 6. The assessee furnished detailed submissions on 17.11.2011 in which inter alia, it was pointed out that the contract in question was a contract for sale of space and was not contract for supply of goods. Therefore, the provisions of Section 194C are not applicable to the facts situation of the case. The Commissioner of Income Tax vide order dated 29.02.2012 passed under Section 263 of the Act, set aside the order of assessment passed by the Assessing Officer dated 22.12.2009 and held that the contract was a contract for advert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of the aforesaid submissions, learned senior counsel for the assessee has placed reliance in the case of Commissioner of Income Tax V/s Glenmark Pharmaceuticals Ltd. (2010) 231 CTR (Bom) 105 : (2010) 324 ITR 199 and in the case of Commissioner of Income Tax V/s Karnataka Power Transmission Corporation Limited, (2012) 208 TAXMAN 73 (Kar) as well as Circular No.13 of 2006 dated 13.12.2006 issued by the Central Board of Direct Taxes. 10. On the other hand, learned counsel for the Revenue has submitted that the Assessing Officer did not examine the issue involved in the instant case while passing the order of assessment. It is further submitted that the matter was taken up by the Commissioner of Income Tax in exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property, whereas the main object in a contract for work is not the transfer of the property, but it is one for work and labour. In the instant case, appellant company had entered into an agreement for bulk sale of advertising space with its holding company on a principal to principal basis by transfer of rights therein. The appellant under the agreement makes purchase of advertisement space and exercises control over such space with the right to either sell it to other or retain it for itself. Thus, it is a transfer of advertising space to the assessee who in turn sells it to others. Therefore, aforesaid transaction can not be termed as supply of goods. At this stage, it is opposite to quote relevant extract of the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a contract for sale and is contract for work. The relevant extract of Circular No.13 of 2006 dated 13.12.2006 reads as under: The matter has been examined by the Board and it is considered that exclusive reliance on Question/Answer No.15 of Circular No.715, without taking into account the principles laid down in Circular No.681 is not justified. Before taking a decision on the applicability of TDS under section 194C on a contract, it would have to be examined whether the contract in question is a contract for work or a contact for sale and TDS shall be applicable only where it is a contract for work . 14. Thus, if the order passed by the Commissioner of Income Tax as well as the order passed by the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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