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[2008] 306 ITR 23 (GUJ.) HIGH COURT OF GUJARAT Commissioner of Income-tax v. Girnar Food and Beverage (P.) Ltd. D.A. MEHTA AND MS. H.N. DEVANI, JJ. TAX APPEAL NOS. 1043 AND 1044 OF 2005 FEBRUARY 21, 2006 Section 194C of the Income-tax Act, 1961 - Deduction of tax at source - Contractors/Sub-contractors, payments to Where contract is for supply of materials, viz., sale of materials, it cannot be termed to be a contract for work and labour and is not amenable to provisions of section 194C Where the contract is for supply of materials, viz., sale of materials, it cannot be termed to be a contract for work and labour and is not amenable to the provisions of section 194C. The assessee placed order for supply of printed materials, but the stand of the revenue was that as the printing was carried out by the supplier as per specifications of the assessee, the arrangement would amount to 'works contract'. The case of the assessee was that it had entered into a contract of purchase/supply simplicter and the entire product was supplied as such, that the supplier was not exclusively supplying such goods to the assessee, that the assessee did not give any printing contract and that there was outright purchase, either by oral or written orders. The question for consideration was as to whether the assessee had entered into a works contract so as to attract TDS under section 194C. Held that supply of printing and packaging materials was a contract for sale and not a services/works contract. As such no deduction of tax at source was required. Manish R. Bhatt for the Appellant. JUDGMENT The appellant-Revenue has proposed the following identically worded three questions in each of these appeals : "(a)Whether, on the facts and circumstances of the case, the Tribunal is right in law in deleting demand raised by the Income-tax Officer (TDS), Valsad, as per order under section 201(1) of the Income-tax Act, 1961, in respect of works contract of printed materials ? (b)Whether, on the facts and circumstances of the case, the Tribunal is right in law in deleting interest demand raised by the Income-tax Officer (TDS), Valsad, as per order under section 201(1A) of the Income-tax Act, 1961…

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