TaxTMI 
TaxTMI 
2012 (5) TMI 620
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....er to state whether the provisions of section 194C r.w.s. 40(a)(ia) of the I.T. Act have been complied with in respect of all the aforesaid payments, it was submitted by the assessee that no TDS in respect of the aforesaid payments have been made. However, no comments were given by the assessee with regard to the specific query raised by the Assessing Officer regarding infringement of provisions of section 194C r.w.s. 40(a)(ia). Under these circumstances, the Assessing Officer presumed that since the assessee has admitted that there was no Tax deducted from the payments made, such admission itself made the position clear regarding violation of section 194C. Accordingly, the Assessing Officer disallowed the aforesaid amount by invoking the provisions of sec 40(a)(ia) on account of infringement of the provisions of sec. 194C. 3. Before CIT(A), it was submitted that a perusal of the list of specified persons in the provisions of sec 194C of the Act would reveal that the status 'individual' was not included in the said list applicable for the year under consideration. It was submitted that the status 'individual' has been included in the list effective from 01-06-2007 and was therefor....
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....omprised therein. 3.4. The provisions of sub section (1) of section 194C as amended by the Finance Act, 2007, w.e.f., 01-06-2007 are not applicable to the year under consideration and therefore, appellant's act of non-deduction of tax at source has not resulted in violation of the provisions of Chapter XVII-B. As such, the Assessing Officer is not justified in making aforesaid disallowances by invoking provisions of section 40(a)(ia) and the same are directed to be deleted". 5. Aggrieved with such order of the CIT(A), the Revenue has filed this appeal by taking the following grounds : (1) The order of the learned CIT (Appeals) is contrary to law and to the facts and circumstances of the case. (2) The learned CIT (Appeals) has erred on facts and in law in deleting the addition of Rs. 1,05,58,750/- u/s. 40(a)(ia) of the income-tax Act, 1961. (3) The learned CIT (Appeals) has wrongly relied on the provisions of section 194C(1)(k) which were made applicable to the 'individual' assessee w.e.f., 01-06-2007. The proper section to be applied to individual and HUF from 01-04-2002. (4) The learned CIT (Appeals) has erred on facts and in law in not appreciating that as per proviso....
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....ld accordingly. 7. After hearing both the sides, the delay in filing of the co. by the assessee is condoned. 8. The learned counsel for the assessee at the outset referring to the decision of the Ahmedabad bench of the Tribunal in the case of Sri Prakash Chandra Juglubhai Lonari Vs. ITO vide ITA 2920/Ahmedabad/2009 order dt 05-10-2011 for A.Y. 2006-07 submitted that the issue is covered in favour of the assessee by the decision of the Tribunal cited (supra). The learned DR on the other end submitted that the said decision is distinguishable since the assessee in that case was a subcontractor whereas in the impugned case the assessee is a contractor. 9. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the decision of the Ahmedabad bench of the Tribunal in the case of Sri Prakashchandra Juglubhai Lonari (supra). There is no dispute to the fact that the assessee is an individual engaged in construction and contract work and the assessment year involved is 2005-06. According to the Revenue, since the assessee has not deducted TDS from the payments mad....
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....assessee since the assessee paid the amount to M/s. Devshree Network Pvt. Ltd., for giving transmission, therefore, the assessee is a "person responsible for paying the sum in question to the contractor". The contractor in the case thus would be M/s. Devshree Network Pvt. Ltd., For applying the provisions of section 194C(1) of the IT Act the contract should be between the contractor and the parties as per the list given from (a) to (j) of section 194C (1) of the IT Act as per the provisions applicable to the assessment year under appeal in which sub-clause(k) being the individual do not find mention. Thus, in the assessment year under appeal, the contract between the contractor and individual would not cast any obligation on the individual to deduct TDS on the payment made to the contractor. Since in this case, payment is made by the assessee to M/s. Devshree Network Pvt. Ltd., for providing cable transmission, therefore, no other person is involved in the transaction/oral contract. Thus, the assessee did not act as a sub-contractor in this case. Since the assessee has not acted as a contractor and no payment is made to the sub-contractor, therefore, the findings of the authorities....