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2013 (7) TMI 538 - GUJARAT HIGH COURTPayment to contractors and sub-contractors - Whether the provisions of section 194C were made applicable for the assessment year 2005-2006 - Held that:- the case of the assessee was not covered under section 194C(1) of the Act since in the present case the payment was made by the assessee to individuals - Till clause (k) was introduced in sub-section (1), the category of individual, HUF or AOP was not included. Such amendment was made with effect from 1st June, 2007 therefore would not apply to the case on hand – this was not a case of relationship between the assessee contractor and the transporters in the capacity of sub-contractors - the nature of relationship between the assessee and the transporter is not a case of sub-contract - none of the responsibilities of the contractor vis-a-vis the execution of the work were fastened on the transporters. Assessee had indemnified ANS Construction against any legal or financial liability if such liability arises in future out of such contract - assessee was solely responsible for execution of the work - No part of such liability was fastened on the transporters - assessee had only availed of the services of such transporters for carrying out the material to the site - to reiterate, for application of section 194C(2) of the Act what was necessary was a relationship between the contractor and sub-contractor and not merely be hiring of an agency by the contractor during the course of execution of the work. In the present case, such vital requirement of relationship of a contractor and sub-contractor between the assessee and the transporters was missing - The Tribunal was perfectly justified in holding that liability to deduct tax at source in this case do not arise – appeal decided against the revenue.
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