TaxTMI 
TaxTMI 
2015 (2) TMI 400
X X X X Extracts X X X X
X X X X Extracts X X X X
....y prove that there existed a oral contract between the assessee and these specialized workers to whom specific tasks were assigned to do a specialized particular type of work. (ii) holding that provisions laid down u/s 40(a)(ia) of IT Act are applicable only for the amount which remains payable at the end of the period and it is not applicable to the amount actually paid during the year whereas as per intention and spirit of the legislature, the disallowance has to be made where TDS was not made as prescribed. (iii) deleting the addition made by the AO by considering the payment to these persons were less than Rs. 20,000/- on each occasion whereas aggregate payment made to the sub-contractors at the year end was exceeding Rs. 50,000/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat if it was noticed that the work had been further sub-contracted, the assigned work would be immediately suspended and 25% deduction would be made from the final billed amount. (b) The AO had examined all the payment vouchers for disbursement of wages. The skilled worker/ team leader, in whose name, the ledger account had been opened, had also signed vouched and received the wages on daily basis alonwith the other labourers. The workers had confirmed their engagement with the appellant on daily wages basis by filing confirmation letters. (c) The wages are calculated on the basis of number of days multiplied by daily wage rate of 100/- , Rs. 125/-, Rs. 150/- and Rs. 200/- etc. as evident from the payment vouchers. None of the team l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that too during assessment proceedings when these vouchers had been specifically examined by them. (f) The AO has alleged that there existed employer-employee relationship between the assessee and labourers, there would have been PF / ESI registration. However, the construction workers working at a construction site are not covered under ESI Act, 1948. It is applicable to workers working within a factory and that too is limited for a period during which they are working within a factory. None of the State Governments have extended the scheme to construction workers since they are mostly migratory.'' 2.3 To support his contentions, assessee relied on following case laws. (1) CIT v. Mrinalini Biri Mfgg. Co. Ltd. [1992] 105 CT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cates that they were not employees and were sub-contractors. Looking at the specific tasks executed by them i.e. wooden work, installation of profile glass sheets, panels etc; they cannot be held as casual laborers, therefore, there is no merit in the ld. CIT(A)'s findings in this behalf. Asessee has not maintained even any wages account and impugned payments have been routed through senior labourer's accounts which also indicates that there was another agency involved in execution of work and disbursement of payments. All these facts, clearly indicate that the alleged casual laborers were actually subcontractors were involved in the execution of the work and payments made to them were liable for TDS u/s 194C. The explanation given ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... job to job. This makes it very clear that they were not subcontractors of any typeand work on hire and fire basis. The payments of wages were made to them through one of their selected senior workman in order to avoid the workload of paying and accounting for each labourer. This fact is clear from the payment pattern which is in multiple of days at the rate of Rs. 100/- to 125/- per day. This has not been disputed. (iv) Audited record doesn't have mentioned of payment on the basis of square foot/meter basis. (v) It has not been controverted that PF and ESI is payable to workers of a factory and not the casual labourers, therefore, the adverse inference drawn by AO in this behalf is misplaced. (vi) There is no continuity of wor....