2015 (6) TMI 453

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.... made by the A.O. at Rs. 1,44,16,556/- after accepting the assessee's plea that sub contractor is not required to deduct TDS u/s.194C on payments made to Sub- Sub Contractor despite the fact that the word Sub - Sub Contractor is merely a graphic indicator and nothing contained in the Act prevents the assessee to deduct TDS on such payments. 2. On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition made by the A.O. at Rs. 1,44,165,556/- after accepting the assessee's plea that provisions of section 40(a) (ia) are not applicable in his case because the provisions of section 40(a)(ia) are applicable on the exp. Claimed u/s.30-38 of the Act only whereas the assessee has claimed the exp.u/....

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..../- made on account of disallowance of the labour payments by invoking the provisions of section 194C of the Act, r.w.s.40(a)(ia) of the Act. Ld.Sr.DR Shri Nimesh Yadav vehemently argued that the ld.CIT(A) was not justified in deleting the addition. He submitted that the addition has been deleted by the ld.CIT(A) holding that the provisions of section 194C(2) of the Act is not applicable on the assessee. Therefore, the assessee was not required to deduct the tax on such payments. He submitted that this finding of the ld.CIT(A) is not justified and against the provisions of law. 3.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that there is no infirmity in the order of the ld.CIT(A). He pla....

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....applicability of provisions of section 194C(2). So far as own labour payment is concerned, the provisions of sec.194C cannot be invoked at all because such payment can never be imagined as payment out of contractual obligations. Even otherwise also none of the payments is in excess of the prescribed limit for deduction of tax. ii. There is a force in submissions of the appellant that direct expenses like labour charges are covered by provision of sec. 28(i) not by provisions of sec.40(a)(ia). This view has been confirmed in the case of K. Shrinivas Naidu vs. ACIT 131 TTJ 17 Hy.Bench. In view of the above position of law and facts the addition on account of disallowance of labour payment is hereby deleted and the ground of appeal is allow....

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....e in hand, the undisputed fact is that the case of the assessee is not a 'contractor' but a 'sub-contractor'. Before the AO, the assessee demonstrated by submitting that Grasim Industries Ltd. was the contractee and Simplex Infrastructure Ltd. was a contractor. The assessee was a sub-contractor of Simplex Infrastructure Ltd. Similarly, Torrent Power Generation Ltd. was a contractee and Shapoorji Paloji & Co.Ltd. was a contractor and the Yogesh Enterprises was a sub-contractor. The submission of the assessee is that he made payments as sub-contractor towards labour expenses, therefore he was not required to deduct the tax at source. The ld.CIT(A) has recorded the fact that out of payment of Rs. 1,68,07,463/-, the assessee had made payment to....