Purchases of materials from a person other than the customer is not a works contract –TDS is not applicable

Brief of the case

In the case of Commissioner of Income Tax Vs The Executive Engineer Court of Karnataka( Kalaburagi Bench) has held that if a person executing the work, purchases the materials from a person other than the customer, the same would not fall within the definition of ‘work’ under Section 194C of the Act and service rendered by person other than professional is covered u/s 194C.

Issue

1. The first issue involved in these appeals is if on the payment made against the supply of materials included in composite contracts for executing Turn Key Projects, provisions under Section 194C of the Income Tax Act, 1961

2. The other issue is if payments made by the assessee to Bellary Computers and IT Solutions, Bellary, towards Bill Management Services are fees for professional and technical services and, therefore, comes within the purview of Section 194J of the Act or payments made towards carrying out work come within the ambit of Section 194C of the Act

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