TaxTMI 
TaxTMI 
2019 (12) TMI 1371
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....income on 14.10.2014 declaring total income of Rs. 14,34,552/-. Thereafter the AO completed the assessment assessing the total income of the assessee at Rs. 19,21,120/- making addition u/s.40(a)(ia) of the Act at Rs. 4,78,949/- along with other additions. Against which the assessee has preferred appeal before the CIT(A) and the CIT(A) after considering the submissions of the assessee and findings of AO has upheld the addition of Rs. 3,12,949/- out of total addition made by the AO at Rs. 4,78,949/- holding that the payments made to the four sardars amounting to Rs. 3,12,949/- are covered by section 194C of the Act and deleted the balance addition of Rs. 1,66,000/-. Now, the assessee is in further appeal against the addition confirmed by the ....
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....alt by the Kolkata Bench of the Tribunal in the case of M/s Kwality Construction passed in ITA No.18/Kol/2014, vide order dated 14.10.2016, wherein the Tribunal relying on its various identical decisions, has upheld the action of CIT(A) in deleting the addition made u/s.40(a)(ia) of the Act holding that labour sardars are not labour suppliers and are facilitators for payments. The relevant observations of the Tribunal are as under :- "8. Heard ld.DR and perused material available on record. We find that the Coordinate Bench of Kolkata Tribunal in the case of M/s. Kwality Construction by an order date 14.10.2016 I.T.A No. 18/Kol/2014 Assessment Year: 2009- 10. Relevant portion of findings are reproduced herein below for better reali....
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.... case of Samanwaya vs ACIT reported in 34 SOT 332 in ITA No. 484 (Kol) of 2008 dated 23.4.2009 directly supports the case of the assessee wherein it was held that :- "We find that in this case, admittedly, the labour sardars in the present case has no locus standi as labour contractor as a labour sardar and a labour contractor are as different as chalk and cheese. We find that there was no contract between the assessee and the labour sardars for supply of labourers and without which there cannot be any application of section 194C and as such the invocation of provision of section 40(a)(ia)is outside the scope and ambit of such enactment. In view of the matter, we are of the considered opinion that section 194C(2) being not applicab....
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....evidence, I can't call them as Labour Sardars but they are enjoying some special status before the assessee. All the payments were made through them as per Books of Accounts whereas the assessee produced the Muster Roll establishing through it that payments were made to the other co-labourers in their presence for the sake of convenience and the amounts were debited in their names only because the assessee can not keep track of all the labourers without the help of these labourers. Though the assessee claims them to be it's labour and these persons have deposed that they are the labourers, yet, I am not fully convinced with their plea that these persons are simply labourers and nothing more than that. From their appearance, dress, behavior ....
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....essee and the labour Sardar-A contractor or a sub-contractor is engaged on the basis of a contract which is the most important essence of a contract job and is a primary requirement for the application of s. 194C- Labour Sardars in the present case has no locus standi as labour contractor as a labour Sardar and a labour contractor are as different as chalk and cheese-There was no contract between the assessee and the labour Sardars for supply of labourers and without which there cannot be any application of s. 194C and as such the invocation of provision of s. 40(a)(ia) is outside the scope and ambit of such enactment" Relying in the aforesaid decisions we find that there is nothing on record to suggest that the payment to labourer....