TaxTMI 
TaxTMI 
2011 (2) TMI 830
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....ng Officer? (b) On the facts and in the circumstances of the case, the learned CIT (A) has erred in not appreciating that addition relates to C & F agency charges includes reimbursement and expenses falls under the ambit of section 1 94C of the Act. (c) The learned CIT(A) on the facts and in the circumstances of the case and in law, erred in not appreciating the facts that clarification in view of circular No.715 dated 08.08.1995 clearly states that any payment to C & F agent including reimbursement is contract." The brief facts in relation to the ground may be noticed. In the relevant accounting year the assessee debited Rs.39,566/- under the head "C & F expenses". In the course of the assessment proceedings, the assessee was requ....
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.... was not required to deduct tax under section 194C. It was contended that the assessee was not covered by the provisions of section 194C because of the judgement of the Hon'ble Bombay High Court in the case of East India Hotels Ltd. Vs. CBDT 179 Taxman 17 in which it was held that the section was not applicable to a service contract which is not specifically included in the section under Explanation III. Reliance was also placed by the assessee on the decision of the Visakhapatnam Bench of the Tribunal in the case of Mythri Transport Corporation Vs. ACIT., (2009) 124 TTJ 970, where it was held that when the risk of the main contract is not passed on to the intermediary then the provisions of section 194C do not apply. 5. The CIT(A) accep....
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....r the contract. (iii) From the fact that the contracts for supply of labour to carry out any work have been specifically brought within the purview of section 1 94C and the fact that four categories of service contracts have been specifically brought within the purview of section 1 94C by inserting Explanation III to section 1 94C,, it cannot be inferred that the services rendered by a hotel to its customers are also covered under section 1 94C. (iii) It is true that the word 'work' in section 1 94C is not restricted to 'works contract' only, as held by the Apex Court in the case of Associated Cement Co.Ltd. Vs. CIT (1993) 201 ITR 345 / 67 Taxman 346. However, as held by the Apex Court in the case of Birla Cement Works (supra) the wor....
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....ayments from the assessee for payment to the concerned authorities. Such payments cannot be considered to be covered by section 194C as they are not for any work of the nature mentioned in Explanation III. It has been so held by the Punjab & Haryana High Court in the case of S.S.C Vs. State of Punjab, (2004) 268 ITR 398. Such payments amount to Rs.76,643/- in the case of M/s. Sar Marine and Rs.1,68,242/- in the case of Vidhi Enterprises. Therefore these amounts in any case are not subject to TDS, even if it is held that section 194C is applicable to the payments in question. However, it must be remembered that the basic question as to whether the payment of the nature made by the assessee are covered by the assessee are covered by Explanati....