TaxTMI 
TaxTMI 
2024 (12) TMI 1106
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....roprietary concerns. About this issue, the AO has found that the assessee has claimed "crew wages expenses" of Rs. 58,76,717/-. It was also noted by the AO that, on that payment no tax was deducted at source. As per AO, the assessee was required to deduct the TDS as applicable u/s. 194C of the IT Act. According to AO, the assessee himself being a contractor, therefore, got the work done by those parties under an implied contract. Held, the payment was made in contravention of section 194C hence invoked provisions of section 40(a)(ia) of the Act, therefore, the amount claimed was disallowed by the AO. The matter was carried before the first appellate authority. 4. Before the first round of appellate proceedings, the CIT (A) deleted the addition made by the AO by holding that the provisions of section 194C(1)(k) is applicable from 1st June 2007 and thus the assessee is out of the clutches of provisions of section 194C of the Act. Aggrieved by the same, the revenue filed an appeal before the ITAT. The ITAT set-aside the order of the CIT (A) and restored the filed to the AO with a direction to verify the details /explanation filed by the assessee and decide the case de-novo on merit....
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....r.) and of R.R. Carrying Corporation v. Asstt. CIT [2009] 126 TTJ 240 (Ctk). 6. From the side of the Revenue, Ld DR placed reliance on the orders of the authorities below. He has argued that as per the provisions of section 194C(2) any person being a contractor responsible for paying any sum to a sub-contractor in pursuance of a contract with the sub-contractor for carrying out any part of the work undertaking by the contractor is required to deduct an amount equal to 1% as TDS. The assessee has not deducted the tax, therefore, the AO has rightly disallowed the claim. Due to this reason, the question of non-deduction of tax, therefore, fall within the ambits of section 194C(2) of the IT Act, ld. DR has pleaded. 7. We have heard both the parties and perused the relevant finding given in the impugned orders and material referred to before us. Before we proceed further, we may like to point out that the provisions of section 194C of the Act had undergone certain vital changes in the recent past. The main purpose of introduction of this section in the Act is to make provisions for deduction of tax at source from payments made to contractors and sub-contractors in certain cases. I....
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....ade by the assessee as crew wages payment is mentioned as under: DETAILS OF CHEQUE ISSUED FOR CREW WAGES FOR THE F.Y. YEAR 2005-06 DATE CHEQUE NAME AMOUNT 16.08.05 112904 S.MOHHMAD 105800 16.08.05 112905 AJAY K.DUTTA 76800 16.08.05 112906 SUSHANT K.SHAU 57500 16.08.05 112907 J.M.DAS 13800 16.08.05 112908 ALI SHAIKH 13800 16.08.05 112909 RAKESH RANJAN 13800 16.08.05 112910 DEEVAKAR RAY 9450 16.08.05 112911 SINDU MAJHEE 16100 16.08.05 112912 SATYADEV 18400 16.08.05 112913 AMIN ISLAM 13800 16.08.05 112914 KAJAL KANTI 18400 16.08.05 112915 SANJAY BHOWMIK 85000 16.08.05 112916 SANJAY BHOWMIK 18800 16.08.05 112918 DESNIBD SEQYEBA 154000 16.08.05 112919 SONIA MITRA 25200 16.08.05 112920 ABDUL 24200 16.08.05 112921 GAUAM 24200 16.08.05 112922 LOKINDER SINGH 11000 16.08.05 112923 NARAYAN CHANDRA 32600 16.08.05 112924 VIJAYA CHANDRA 24200 16.08.05 112925 MONI MOHAN 32600 16.08.05 112926 BINITA SINGH 35540 16.08.....
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....ANE DD 18000 18.01.06 211600 JAGJIT SINGH WALIA 50000 18.01.06 211601 PUSPA RANI DD 18000 18.01.06 211603 RESHMA S KHALPE DD 18000 18.01.06 211604 UMA S. SINGH 20000 18.01.06 211605 ANITA HALDER DD 15200 21.01.06 211602 USHA DEVASHRI 30000 21.01.06 211606 ASIYA ARIF 4906 28.01.06 211609 USHA DEVASHRI DD 282500 07.02.06 211613 MAHENDRA SINGH 30000 09.02.06 211614 LAXMI CHANDRA 30000 16.02.06 211617 PATRICK JOSEPH 7500 16.02.06 211618 PATRICK JOSEPH 7500 16.02.06 211619 SUBH ARDHYA 8500 17.02.06 211621 TRABAI L PATEL 19200 17.02.06 211622 PUSPA RANI DD 31120 17.02.06 211623 RESHMA S KHALPE DD 25935 17.02.06 211624 UMA SHAVKAR SINGH 45600 17.02.06 211626 HUSSIAN B ABBAI 105000 17.02.06 211627 A.R.SHARMA DD 12550 17.02.06 211625 ANITA HALDER DD 35110 17.02.06 211628 TEJENDRA WALIA 147545 17.02.06 211629 AMBATI ASIF 19750 17.02.06 211630 KAMAL DEEP SINGH 55860 17.02.06 211631 DATA RAM 24400 17.02.0....
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....L CREW WAGES 5876709.04 ACTUAL AS PER P & L 5876717 Difference 7.96 10. The view of the AO was that on payment of "crew wages expense", the assessee being a sub-contractor was required to deduct the tax at source as prescribed under sub-section (2) of section 194C of the Act. On the other hand, the assessee's contention is that the assessee has not acted as a sub-contractor but only as a contractor. As per assessee's contention it was a principal to principal arrangement for providing crew to carry out scrapping activity, so not covered by any of the said contracts. In support of this submission, the assessee has placed reliance on a Board's Circular No. 715 dated 8-8-1995 [215 ITR (Statute 12)] 11. In the context of above clarification issued by the CBDT, if we examine the issue in hand, then in terms of the provisions of section 194C(2) of the Act conditions to be satisfied are (i) that the assessee should be a contractor, (ii) that the assessee should enter into a contract with a sub-contractor, (iii) that the sub-contractor shoul....