1) The assessee-company, manufacturing and selling vehicles, was charging customers for services in nature of repair and maintenance of vehicles to be undertaken on reaching different milestones.
2) Under manufacturer-dealer contract, assessee's authorised dealers were obliged to provide such services to vehicles that satisfied conditions of warranty (qua services), against service coupons issued by assessee to customers.
3) The assessee allowed payment/credit to authorised dealers on presentation of service coupons received by them from vehicle owners on providing services. The Assessing Officer disallowed such payments made to dealers for non-deduction of tax at source under section 194C.
The ITAT held as under: