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Issues Involved:
The interpretation of whether the carriage of goods constitutes "carrying out" of "any work" under section 194C of the Income Tax Act, 1961. Summary: The petitioners, transport operators, challenged the applicability of section 194C and Circular No. 681 issued by the Central Board of Direct Taxes to transport contracts. They argued that transport contracts do not fall under the purview of "carrying out any work." The respondents contended that the circular was in line with the Act. The court analyzed the definition of "work" and concluded that transporting goods qualifies as work under section 194C, even if it does not involve loading and unloading labor. The court disagreed with the petitioners' interpretation of the circulars and emphasized that income derived from carrying out work must have tax deductions applied. Referring to decisions by the Bombay and Calcutta High Courts, the court disagreed with their interpretation of the Supreme Court's judgment on section 194C. It held that the circular's provision including transport contracts under section 194C was valid and legal, differing from the other High Courts' views. Despite reluctance, the court dismissed the writ petition, upholding the validity of the circular's application to transport contracts under section 194C. No costs were awarded in this case.
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