|The Tax Publishers2020 TaxPub(DT) 5090 (Chd-Trib)
INCOME TAX ACT 1961
While determining milling cost, the amount of TDS under section 194C paid by assessee need not be increased by the cost of by-product as the said by-products come into ownership of the millers from the very point of coming of it into existence and was also not passed on by assessee.
Tax deduction at source - Under section 194C - Leviability on by-products -
AO held that while determining milling cost, the amount of TDS under section 194C paid by assessee, a procurement agency, need to be increased by the cost of by-product for the purpose of deduction. Held: The property in the by-products comes into ownership of the millers from the very point of coming of it into existence, hence, in this case the assessees were not the owners of the by-products. Another factor for consideration was that the property passed 'in-kind' should have some ascertainable and determinable value, which can be taken as part of the consideration paid for the work done. Further, it is the nature of the contract, term of the agreement, the intention of the parties and overall facts and circumstances of the case which are required to be analyzed and considered for determining as to whether the provisions of section 194C or other similar provisions of the Chapter would be attracted or not in a particular case. Thus, it was held that as the property in the by-product was not passed on by the assessee as milling charges, TDS provisions of section 194C were not attracted in this case.
Followed:ITO v. Distt. Manager, Punjab State Warehousing Corporation [ITA Nos. 1309 & 1310/CHD/2016, ITA Nos. 1312 & 1313/CHD/2016, ITA No. 1314/CHD/2016, ITA Nos. 1424 & 1425/CHD/2017, ITA No. 78/CHD/2018, ITA Nos. 316 & 317/CHD/2018, ITA Nos. 318 & 319/CHD/2018, ITA No. 321 /CHD/2018 And ITA No. 322/CHD/2018, dt. 30-10-2018].
FAVOUR : In assessee's favour.
A.Y. : 2012-13 & 2013-14
IN THE ITAT, CHANDIGARH BENCH
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