TaxTMI 
TaxTMI 
2015 (8) TMI 1025
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.... for manufacturing of passenger cars. Referring to the order of the Assessing Officer, the ld. DR pointed out that the assessee entered into job works with various companies for the purpose of purchasing the required spare parts for manufacturing passenger cars. According to the ld. DR, when the assessee entered into works contract with other manufacturers, it has to necessarily deduct tax u/s 194C of the Act at the time of making the payment or crediting the amount in the account of the respective persons. The ld. DR further submitted that the vendor of the assessee manufacture the goods exclusively for the assessee and the goods manufactured by the vendor cannot be sold to anyone other than the assessee. Referring to the assessment order, more particularly para 4.3.5, the ld. DR submitted that in fact the vendor was prohibited from manufacturing the same component for other parties therefore, the vender is manufacturing the goods for supplying the same to the assessee. The ld. DR further submitted that the vendor manufacture the goods as per the specification provided by the assessee therefore, the same cannot be used for other companies who are engaged in the business of manufac....
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.... the Act. Referring to the provisions of section 194C, the ld. Counsel clarified that 194C is applicable only in respect of works contract and not for purchase of the goods. Even otherwise, according to the ld. Counsel, the recipient of the amount has already paid the taxes. The confirmation letters from the respective vendors were also filed. According to the ld. Counsel, all the vendors have paid the taxes in advance under the scheme of the Income-tax Act. Therefore, there is no question of disallowing the claim of the assessee. The ld. Counsel further submitted that the recipients/vendors have confirmed the payment of income tax and the copy of confirmation letters are available at pages 1 to 15 of the paper book. 6. The ld. Counsel further submitted that in Hindustan Shipyard Ltd vs State of Andhra Pradesh [2000] 119 STC 533, the Apex Court had an occasion to consider an identical issue. A ship builder entered into a contract to build, launch, fit equip, test and complete a specified number of vessels at a ship yard and to deliver them. The building of the vessels was to be under the instructions and specifications provided by the respective parties. The builder has to furni....
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....ndia Pvt. Ltd. The title of the agreement is described as 'Basic Purchase Agreement' and executed on 2.1.2008. Clause 3.1 of the agreement provides that the assessee shall furnish the vendor with drawings, documents, samples etc. of the ordered parts so as to enable the vendor to manufacture the product. This clause further provides for providing moulds, machinery, facilities and/or raw materials. At Clause 5.1 of the agreement, the assessee has to supply the raw material, semi finished products, products etc. The material supplied by the assessee shall be used exclusively for manufacturing the products ordered by the assessee. The vendor has no right to divert the material for other use. From the above agreement, it is obvious that apart from providing drawings, documents, samples, moulds, machinery, facilities, the assessee has also to provide raw material so as to enable the vendor to manufacture the products ordered by the assessee. The vendor has no right to use the raw material supplied by the assessee for any other use. Therefore, the agreement now filed before the Tribunal discloses that the assessee has to supply the raw material and the vendor has to manufacture t....
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....usion that the assessee has to deduct tax in respect of the raw material supplied under the works contract. In the absence of any other provisions in the agreement which enable the assessee to purchase the goods directly other than the raw material supplied, it is not known how the CIT(A) came to the conclusion that the material supplied by the vendor is pure contract for sale. 10. The assessee has filed a copy of the letter dated 13.11.2009 from Hanil Automotive India Pvt. Ltd. In this letter, M/s Hanil Automotive India Pvt. Ltd admits that for job work of automobile parts to the customers, the company quotes the price for job work only. The material would be supplied by the customer and the company in turn carries out the job work and returns the finished goods to the respective customers. M/s Hanil Automotive India PVt. Ltd. manufacture spare parts to various other manufactures of motor cars other than the assessee. Since the agreement does not clarify whether the goods purchased by the assessee is one of contract for sale or works contract, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. The CIT(A) has already obse....
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.... assessee that there was any failure on the part of the assessee to disclose the material facts which are necessary for completing the assessment. In fact, the Assessing Officer reopened the assessment only on the basis of the retrospective amendment made by the legislature in section 80HHC(3) of the Act. According to the ld. Counsel, the assessee is expected to file the return of income on the basis of law which prevails on the last day of the financial year relevant to the assessment year. The assessee is not expected to anticipate the amendment made by the Parliament in 2005 retrospectively while filing the return of income for the assessment year 2002-03. Therefore, according to the ld. Counsel, there is no negligence on the part of the assessee in disclosing the material facts relevant for completing the assessment, hence the reopening of assessment is not valid. 2. On the contrary, Shri Joe Sebastian, the ld. DR submitted that the Assessing Officer has every authority to reopen the assessment provided there is a tangible material available on record to show that any income chargeable to tax has escaped assessment. According to the ld. DR, the original assessment was in fac....