Judgment:
1. 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?
(c) Whether the Income-tax Appellate Tribunal is right in law in considering supply of printing and packaging materials as a contract for sale and not a services/works contract?
2. Heard Mr. M.R. Bhatt, learned senior standing Counsel for the appellant. He has assailed the impugned order of the Tribunal dated November 30, 2004, which is consolidated for two years, on the principal ground that the assessee had entered into 'works contract' because the assessee was getting the materials, like jute bags and polythene bags with design logo/brand printed on such material after providing specifications to the supplier. The assessee was, therefore, liable to deduct tax at source under Section 194C of the Income-tax Act, 1961 ('the Act') before making payment to the suppliers, and the assessee having failed to do so was liable under Section 201 and 201(1A) of the Act to pay the amount and interest respectively as specified by the Assessing Officer. That the Tribunal had incorrectly come to the conclusion that this was a contract for sale of materials simpliciter, and thus the impugned order of the Tribunal gave rise to a substantial question of law. In support of the submissions he has invited attention to Circular No. 666, dated October 8, 1993 [1993] 204 ITR 40, Circular No. 681, dated March 8, 1994 [1994] 206 ITR 299 and Circular No. 715, dated August 8, 1995 [1995] 215 ITR 12.
3. As can be seen from the impugned order of the Tribunal, the facts are not in dispute. The assessee placed order for supply of printed materials, but the stand of the Revenue is 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 is that it had entered into a contract of purchase/supply simpliciter and the entire product is supplied as such; that the suppliers are not exclusively supplying such goods to the assessee. That the assessee does not give any printing contract and there is outright purchase, either by oral or written orders.
4. The Tribunal while passing the impugned order has placed reliance on the Central Board of Direct Taxes Circular No. 715 wherein it is stated by the Board that in a case of sale no deduction under Section 194C of the Act is required.
5. On going through all the three circulars it is apparent that 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 of the Act.
6. In these circumstances, the Tribunal having based its decision on the explanatory circular issued by the Central Board of Direct Taxes there is no infirmity in the impugned order of the Tribunal. In the absence of any substantial question of law the appeals are dismissed. Registry to place copy of this order in cognate matter.