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2011 (5) TMI 666 - ITAT, AHMEDABADAddition made u/s.40(a)(ia) of the Act being amounts paid to Subcontractors without deducting the tax at source as required under section 194C(2) of the IT Act, 1961 - held that:- AO disallowed the entire payment made to the farmers amounting to Rs.2,57,62,253/- by invoking the provisions of section 40(a)(i) of he IT Act. Apart from this, the AO disallowed Rs. 51,47,250/- under Section 40A(3) of the Act. Thus, the disallowance of Rs.51,47,250/- was made twice i.e. once under Section 40A(3) and then invoking section 40(a)(ia). After carefully considering the reasons which lead to formation of the society, we are convinced that the assessee has no profit motive and more of a welfare activity performed by the assessee. It was acted as an interface between farmers and the ONGC for the limited purpose of receiving the jeep rental income on behalf of the illiterate farmers. The main purpose of this mechanism is to help both ONGC and the farmers as it precluded the individual interaction and smoothen the entire operation. The Society was also debarred from hiring the vehicles of the farmers to other clients whose land is acquired by the ONGC. In these circumstances, the learned CIT (A) is factually and legally correct in holding that the assessee has not performed the service of tour operators. It was providing services to the members of the society only. In these circumstances, the decision of the ITAT, Pune Bench in the case of Datta Digambar Saaakari Kamgar Sanstha Ltd. (2000 -TMI - 71629 - ITAT PUNE) relied upon by the learned CIT (A) in the impugned order is more relevant and identical to the facts before us.
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