TDS u/s 194C not deductible on payment under ‘Sales or Return’ agreement

ACIT (OSD) (TDS)-2(2) Vs Shoppers Stop Ltd (ITAT Mumbai)

ITAT Mumbai held that payments made under ‘Sales or Return’ agreements not covered under section 194C of the Income Tax Act. Hence, TDS not deductible.

Facts-

The main grievance of the revenue is directed against the action of the Ld. CIT(A) in holding that, the payments made by the assessee to several vendors in relation to its procurements from them, consisting of appeals/clothes/footwear/goods manufactured by these vendors, were not in the nature of “works contract” but “purchase of goods” and that, therefore, the provisions of Section 194C of the Income Tax Act, 1961 (hereinafter “the Act”) invoked by the Assessing Officer in relation thereto, were not applicable.

Conclusion-

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