2011 (2) TMI 115

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....ubstantial question of law.   "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting disallowance of Rs.52,22,500/- made under Section 40(a)(ia) of the Income Tax Act made on the ground that the assessee had not deducted tax at source on the payments made to the Miller charges and road Roller hire charges as required under Section 194C of the Act."   3. The issue relates to alleged default committed by the respondent-assessee in making the TDS in respect of the hire charges paid by the respondent assessee, for having hired Millers and Rollers, for the purpose of carrying out his road contract works. According to the revenue, since in the case on hand, the hire char....

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....a) of the Income Tax Act.   4. Having heard Mr.Subramaniam, learned Senior Standing Counsel for the appellant and having perused the order of the Assessing Officer, the Commissioner of Income Tax (Appeals) as well as that of the Tribunal, we are convinced that the conclusion of the Tribunal was well justified. 5. The learned Standing Counsel in his submissions contended that the conclusion of the Commissioner of Income Tax (Appeals) in having treated 10% of the total sum paid by way of hire charges towards labour element and the consequential conclusion that the non-deduction as required under Section 194-C of the Income Tax Act would necessarily result in addition of the entire sum of Rs.52,22,500/- by invoking Section 40(a)(ia)....

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....ted by us earlier, there was no material evidence or statement of any one to say in definite terms that the supply of such Millers and Rollers were along with its respective operators. Therefore, in the absence of any such acceptable material, the conclusion of the Assessing Officer in treating the hiring of Millers and Rollers as one falling under the category of sub-contract for provision of Labour or the conclusion of the Commissioner of Income Tax (Appeals) that atleast 10% of the total payment of Rs.52,22,500/- would have been incurred by way of labour charges by the respective owners, cannot be accepted.   7. Viewed in that respect, the conclusion of the Tribunal, in having held that the relevant Section which was applicable t....