I am afraid to in disagreement with you. It is true that as per circular no. 715 of CBDT dated 08/08/1995, section 194C will be applied in case of supply of printed material as per specification. I would like to draw your kind attention on the following judgment:- The Hon’ble Court observed that when the printing work was being carried out in the suppliers premises though as per the specifications of the assessee the supply was limited to the quantity specified in the purchase order. There was nothing on record to show that all other ancillary costs like the labels, ink papers, screen printing, screens, etc. were being supplied by assessee to the supplier. You may kindly refer :- BDA Ltd. vs. ITO (TDS) (2006) 281 ITR 99 (Bom.) The Hon’ble Court held that the supply of printed labels by supplier to the assessee was a “contract of sale” and it could not be termed a “works contract”. Hence the provisions of section 194C were not applicable.
I would also draw your kind attention on the following case:- V.M. SALGAOKAR & BROS LTD. VS I.T.O. & OTHRS. (KARNATAKA) 1999-237-ITR 630 Wherein emphasis has been given on Labour Works only.
May I request you to kindly respond if I am on the wrong footings.
01 December 2007
Further, I would like to quote the recent judgement:- Whirlpool of India Ltd. vs. JCIT Citation 109 TTJ 994
Followed Wadilal Dairy International Ltd. vs ACIT 70 TTJ 77
TDS-Work contract, Job work, Sale of goods - Goods manufactured as per customers specifications The assessee was manufacturing and trading in consumer electronic and trading in consumer electronic and home appliances. It outsourced manufacture of these articles from various concerns referred to as OEMs. The OEMs purchased raw materials on their own and manufactured the goods as per assessee's specifications. The property in goods passed to the assessee on delivery of manufactured goods. It was a case of sale of goods and not that of job work or work contact. There was no liability for TDS under s.194C.
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