Deduction of income-tax at source-Section 194C of the Income-tax Act, 1961-Payments to contractors and sub-contractors

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..... r, Government of India. To All State Governments. Subject: Deduction of income-tax at source-Section 194C of the Income-tax Act, 1961-Payments to contractors and sub-contractors. Sir, Pursuant to the decision of the Supreme Court in Brij Bhushan Lal Parduman Kumar v. CIT [1978] 115 ITR 524, several representations were received seeking modification of para. 1( .....

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..... r a dam, e.g., a composite works contract, and the Government or the other specified person had undertaken to supply all or any of the materials necessary for the work at stipulated price, the deduction would have to be related to the gross payment without excluding the cost of the materials. 3. The decision of the Supreme Court in Brij Bhushan Lal's case is on the manner of computing the incom .....

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..... orporated into the work, the cost of such stores and materials could not be included in the turnover of the contractor as there was not even a theoretical possibility of any profit being made by the contractor from such stores or materials. This case has no bearing on the facts of the case before us, because under s. 194C(1) deduction has not to be made from profits made by the contractor, but fro .....

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