In the present matter:

1.  The assessee placed order for supply of printed materials as per specifications.

2.  Revenue treated this order as works contract because the printing was carried out by the supplier as per specifications of the assessee.

3.  ITAT with reference to circular no. 715 held that it is a contract of sale and provisions of TDS under section 194C are not attracted.

Revenue appealed against the order of ITAT before the Gujarat High Court. Department has relied upon the circular No.666 dated 8-10-1993, Circular No.681 dated 8-3-1994 and Circular No.715 dated 8-8-1995.

Honorable Gujarat High Court held that the Tribunal having based its decision on the explanatory circular issued by CBDT there is no infirmity in the impugned order of Tribunal. In absence of any substantial question of law the appeals are dismissed.

(For full text of judgment - visit 2008 -TMI - 31380 - GUJARAT HIGH COURT)

 

TDS on contract payments not attracted where supply of printed materials is a sale executed to buyer's specifications. The Tribunal, relying on CBDT Circular No.715, characterised supply of printed materials made to purchaser's specifications as a contract of sale and concluded that TDS under section 194C did not apply; the Gujarat High Court found no infirmity in that reasoning and dismissed the department's appeals for want of any substantial question of law.