Supreme Court seeks reply from Samsung India on TDS
New Delhi: The Supreme Court has sought a reply from Samsung India Electronics on the I-T department plea that the firm is liable to deduct tax in respect of goods outsourced for manufacturing.
The issue has been raised by the income-tax department saying that consumer electronics and home appliances manufacturer Samsung India Electronics Ltd is liable to deduct tax in respect of goods outsourced for manufacturing to other manufacturers or original equipment manufacturers (OEMs).
A Bench headed by Justice S H Kapadia has sought reply from Samsung on this.
Challenging the Delhi High Court judgment that dismissed its plea, the I-T department said that the contracts for manufacturing products bearing the company`s trademark are not sale deals but agreements for carrying out work.
It further said that under Section 194-C of the Income-Tax Act, 1961, tax should be deducted on such Contracts.
Relying on the apex court`s decisions in various cases, Additional Solicitor General Gourab Bannerjee said that in a works or service contract, the person performing or rendering the service has no property in what has been produced, notwithstanding the fact that part or even the whole of the material used by him might be his property.
The I-T department said that goods produced must have an individual existence as the property of the manufacturer who produced it.
After studying Samsung`s transactions and the agreements, it was clear that those were not contracts for selling goods, the petition said, adding that as the goods carried the brand name Samsung, they could not have been legally sold by the manufacturers and, therefore, they were not commercial commodities.
"The manufacturers were not at liberty to dispose the products in the manner they found most beneficial or apt. Thus, the transactions were contracts for carrying out work and the respondent (Samsung) was liable to deduct tax on the same," the petition said.
"The entire production was being undertaken at the behest of the respondent (in accordance with) its technical specifications, which in turn were governed through strict quality controls audits, personal supervisions and other measures," it stated.
The department rejected Samsung`s contention that the arrangement with the manufacturers was in the nature of `purchase and sale` and on a principal-to-principal basis.
The authorities had also dismissed the company`s argument that sales tax and excise duty were being paid by the manufacturers and the goods remained their property till they were delivered to Samsung.
However, the Commissioner of Income-Tax (Appeals), on Samsung`s plea, while holding that the transactions were sales, had set aside the department`s order asking the company to pay tax of more than Rs 1.67 crore for 2003-04.
Both the Income Tax Appellate Tribunal and the High Court had held that the transactions were in the nature of the contracts for sale and not in nature of work contracts.
More from India
More from World
More from Sports
More from Entertaiment
- IAF Mirage fighter plane lands on Yamuna Expressway!
- 'Maggi' under regulatory scanner for excess amount of lead, MSG
- Watch: Michelle Obama's 'Gimme Five' fitness video
- When Subramanian Swamy shocked people at a wedding!
- Expect that Rahul will be Congress president in 2015: Jairam Ramesh
- Mumbaikars join hands to save Pakistani teen with rare illness
- DNA: Analysis of Hurriyat chief Syed Geelani's passport issue
- DNA: Analysis of traffic system of Vancouver, Canada
- Mumbai: Diamond export company denies job to Muslim youth
- Aapke Sitare: Astro prediction for May 21, 2015
- Mirage 2000 fighter jet landing was part of capability demonstration: IAF
- DNA: IAF Mirage 2000 fighter plane lands successfully on Yamuna expressway
- DNA: Osama documents show 'Indian brother in Madinah' financed al Qaeda
- PM Modi's key campaign team member may join Nitish Kumar
- Woman robbed at gunpoint inside Hyderabad ATM
- RBSE (rajresults.nic.in) Class 12th science and commerce results 2015: Rajasthan Board Class 12th XII exam results 2015 expected to be announced on May 21
- RBSE (rajresults.nic.in) Class 12th science and commerce results 2015: Rajasthan Board Class 12th XII exam results 2015 to be announced today at 4 PM
- JAC 12th Inter Arts Result 2015: JAC 12th Inter Arts Result 2015 (jharkhandeducation.net) likely to be announced on Thursday May 21 at 1 PM
- CBSE Class 10 Results 2015 to be announced today?
- IAF jet lands on Yamuna expressway
- Check Jharkhand Board jac.nic.in: Class 12th Art Results 2015 declared
- Andhra Pradesh EAMCET results 2015: Andhra Pradesh EAMCET results to be announced on May 21 at www.apeamcet.org
- Log on to apeamcet.org AP EAMCET Results 2015: Andhra Pradesh EAMCET Marks and AP EAMCET Ranks 2015 declared
- Fawad Khan doesn’t want intimate scenes with Sonam Kapoor?
- We hire only non-Muslim candidates, diamond export firm tells Muslim youth
- IPL 2015: Rajasthan Royals vs Royal Challengers Bangalore - As it happened...
- DHSE (dhsekerala.gov.in) 12th Result 2015: Kerala DHSE Class 12th XII exam results 2015 to be announced on May 21
- Is MSG in 'Maggi' noodles harmful for you?
- SSLC (tnresults.nic.in) Tenth 10th Results 2015: Tamil Nadu Board Class 10th X Higher Secondary exam results 2015 to be declared on May 21
- 'IAS officer DK Ravi possibly committed suicide, suffered big loss in real estate business'