TaxTMI 
TaxTMI 
2019 (11) TMI 811
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....ter referred to as the 'Act' for short) has been filed by the assessee in which an additional substantial question of law was framed today, which reads as under: "Whether that Commissioner as well as Tribunal, in the absence of finding that contract in question is a contract for work, erred in law, in holding that Section 194C applies to fact situation of the case?" 3. The facts giving rise to filing of this appeal briefly stated are that, the assessee is a Company registered under the provisions of the Companies Act, 1956. The assessee is engaged in the business of printing and publishing newspapers. The assessee had entered into an agreement for bulk sale of advertising space dated 17.01.2007 with Bennett, Coleman and Co. Ltd. (hereina....
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....as stated that the tax was not deductable on the said payment and the proceeding be dropped. On being satisfied the Assessing Officer did not pass any rectification order. Thereafter, a notice dated 11.10.2011 was issued by the Commissioner of Income Tax, Hubballi under Section 263 of the Act in which inter alia, it was stated that since the tax has not been deducted at source under Section 194C of the Act on the cost of advertisement space, the amount requires to be disallowed under Section 40(a)(ia) of the Act. In the notice, it is further stated that the order of assessment dated 22.12.2009 is erroneous and is prejudicial to the interest of the Revenue. 6. The assessee furnished detailed submissions on 17.11.2011 in which inter alia, it....
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....t the provision of Section 194C would not apply in the case of contract of sale and shall be applicable only in case of contract for work. It is therefore submitted that despite recording the finding in favour of the assessee that the contract in question is a contract for sale, the Commissioner of Income Tax as well as Tribunal grossly erred in holding that Section 194C applies to the fact situation of the case. 9. In support of the aforesaid submissions, learned senior counsel for the assessee has placed reliance in the case of Commissioner of Income Tax V/s Glenmark Pharmaceuticals Ltd. (2010) 231 CTR (Bom) 105 : (2010) 324 ITR 199 and in the case of Commissioner of Income Tax V/s Karnataka Power Transmission Corporation Limited, (2012)....
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....a Pradesh (2000) 119 STC 533 (SC) enunciated certain principles and drew a distinction between two concepts namely "contract for sale of goods" and "works contract". Similarly, in State of Andhra Pradesh vs. KONE Elevators (India) Ltd., (2005)3 SCC 389, the Supreme Court has held that the main object in a contract of sale is the transfer of property and delivery of possession of the property, whereas the main object in a contract for work is not the transfer of the property, but it is one for work and labour. In the instant case, appellant company had entered into an agreement for bulk sale of advertising space with its' holding company on a principal to principal basis by transfer of rights therein. The appellant under the agreement makes ....
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....ls it to others. Therefore, in our view, the decision in the case of Sands Advertising Communications P.Ltd. (supra) is distinguishable on facts and would not come to the assessee's rescue." 13. Thus, it is evident that the Commissioner of Income Tax as well as the Income Tax Appellate Tribunal has nowhere held that the contract in question is not a contract for sale and is contract for work. The relevant extract of Circular No.13 of 2006 dated 13.12.2006 reads as under: "The matter has been examined by the Board and it is considered that exclusive reliance on Question/Answer No.15 of Circular No.715, without taking into account the principles laid down in Circular No.681 is not justified. Before taking a decision on the applicability of....