TDS on milling by-products not required where millers retained residuals and only stipulated milling charges were paid.

Under milling contracts where a State agency procured paddy and paid only stipulated milling charges, the by-products and residuals retained by the millers were treated as belonging to the millers, with no separate payment made by the assessee for those items. Applying the same view taken in the assessee's earlier and connected matters, and finding no contrary material or different facts to justify a departure, the Tribunal noted that tax was not required to be deducted at source under section 194C on the value of the by-products retained by the millers.

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Issues: Whether the assessee was required to deduct tax at source under section 194C of the Income-tax Act, 1961 on the value of by-products retained by the millers under the milling arrangement.

Analysis: The assessee was a State agency procuring paddy and getting it milled under contracts that provided for payment of milling charges, while the millers retained the by-products. The facts were held to be identical to earlier decisions of the Tribunal in the assessee's own case and in connected matters, and no contrary material or different factual position was shown to warrant departure from the consistent view already taken. On the contractual terms, the by-products and residuals were treated as belonging to the millers, and no separate payment was made by the assessee for the milling services beyond the stipulated charges.

Conclusion: The assessee was not required to deduct tax at source under section 194C on the value of the by-products.

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