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Section 194C TDS does not apply to contract manufacturing agreements -SC

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SUPREME COURT OF INDIA

Petition(s) for Special Leave to Appeal (Civil) No(s). 18012/2009

(From the judgement and order dated 11/11/2008 in ITA No.1259/2007 of  The HIGH COURT OF DELHI AT N. DELHI)

C.I.T-XVII, DELHI

VERSUS

SILVER OAK LABORATORIES P.LTD.

[For Final Disposal] [For Directions]

With S.L.P. (C) No.18073 of 2009

(With office report) [For Final Disposal]

S.L.P. (C) No.19648 of 2009

(With appln.(s) for c/delay in filing SLP, exemption from filing c/c of the impugned judgement and amendment of cause title)

[For Final Disposal]

S.L.P. (C) No.19650 of 2009

(With appln.(s) for c/delay in filing SLP and office report) [For Final Disposal]

S.L.P. (C) No.30252 of 2009

(With office report) [For Final Disposal] [For Directions]

S.L.P. (C) No.20907 of 2009 [For Final Disposal]

S.L.P. (C) No.30705 of 2009

(With office report) [For Final Disposal]

S.L.P. (C) No.20899 of 2009 [For Final Disposal]

S.L.P. (C) No.2 1066 of 2009

S.L.P. (C) No.21788 of 2009 (With office report)

[For Final Disposal]

S.L.P. (C) No.30853 of 2009 (With office report)

[For Final Disposal]

S.L.P. (C) No.30248 of 2009 (With office report)

Date: 17/08/20 10 These Matters were called on for hearing today.

CORAM :

HON’BLE THE CHIEF JUSTICE

HON’BLE MR. JUSTICE K.S. RADHAKRISHNAN

For Petitioner(s)Mr. Bishwajit Bhattacharya,ASG. Mr. Arijit Prasad,Adv.

Mr. H.R. Rao,Adv.

Mr. Rohit Sharma,Adv.

Mr. Vikas Malhotra,Adv.

Mr. Ajay Singh,Adv.

Mr. B.V. Balaram Das,Adv.

For Respondent(s) Mr. K.B. Upadhyay,Adv. Mr. S.K. Divakar,Adv.

Mr. S.R. Setia,Adv.

Mr. K. Sampath,Adv. Mr. R.K. Raghavan,Adv. Mr. K.V. Mohan,Adv.

Mr. S. Ganesh,Sr.Adv. Mr. S. Sukumaran,Adv. Mr. Anand Sukumar,Adv. Mr. Bhupesh Kumar,Adv. Ms. Meera Mathur,Adv.

Mr. Satyen Sethi,Adv.

Mr. Arta Trana Panda,Adv.

Mr. Rameshwar Prasad Goyal,Adv.

Mr. Ajay Vohra,Adv. Ms. Kavita Jha,Adv.

UPON hearing counsel the Court made the following O R D E R

On examining the terms and conditions and also on examination of the invoices, purchase orders as well as the challans indicating payment of excise duty, we are of the view that there is no material on record to indicate that the transaction in question is a “contract for carrying out works”. Hence, Section 194C of the Income Tax Act, 1961, [`Act', for short] is not attracted. Our attention, in fact, is invited to the amendment in Section 1 94C of the Act vide Finance (No.2) Act, 2009, with effect from 1st October, 2009, which defines “work” to include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer. In fact, it is clarified that the definition of the word “work” will not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person other than such customer. However, this amendment came into force only with effect from 1st October, 2009, which will not apply to the period in question in the present case(s).

For the aforestated reasons, we find no reasons to interfere with the impugned judgments of the High Court. The special leave petitions are, accordingly, dismissed.


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