East India Hotels Ltd and another v. CBDT and another (320 ITR 526)
• The assessee offers various facilities to its guest apart from boarding and lodging
• The question before the Bombay High Court was whether the same should be subject to TDS u/s 1 94C
• The word “carrying out work” u/s 194C is limited to any work which on being carried out culminates into a product or result (reliance was placed on the decision of the SC in case of Associated Cements)
• Circular 681 dated 3 March 1994 to the extent it applies to a customer availing the services of a hotel, should be held contrary to section 1 94C
• The word work has to be understood in the limited sense and would extend only to the service contracts specifically included in (the then) Explanation III to section 194C.