A company having engage in the business of automobiles place order to a body builder for fabrication of a dumper to be fitted on a chssis. The body builder fabricate the dumper on the chssis and send it back to the company. The body builder raise the invoice mentioning ' fabrication of dumper on the chassis no. *********'. The body builder also charged sales tax on the aforesaid amount. The company treat the chasis as well as dumper as purchase in his books of accounts and the company sold the chasis along with dumper fitted to the customer under one invoice mentioning ' chasis no. ******** alonwith dumper fitted on it'.
The AO wants to treat the transactions as contract and wants to impose non deduction of TDS penalty. Whether there is any case law/ clarification in this matter so that same can not be treated as contract.
DEar Friend
I think the view taken by the AO 's correct, bcos if u see the wording of sec 194C, it practically covers "any work" & those exactly are the words used by the lawmakers.
The ratio for coverage has now been clearly laid out in very famous ACC's case decided some years ago.
CA Deepak Gadgil
Solapur
CAclubindia
