TMI Blog2007 (1) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... er by ignoring the relevant material and evidences available on record and by relying on erroneous facts and irrelevant and extraneous consideration. (3) For the finding of Ld. Commissioner of Income-tax (Appeals) that Khaitan Services Ltd. carried out any work on behalf of the appellant which attracted the provisions of section 194C of the Act is without any basis and/or material and is based on surmises and conjectures. (4) For that admittedly no work was carried out by Khaitan Services Ltd. on behalf of the appellant and no payment was made by the appellant to Khaitan Services Ltd. for carrying out any work for them which would attract the provisions of section 194C of the Act and as such the Ld. Commissioner of Income-tax (Appeals) should have held that the demand made under section 201(1) and levy of interest under section 201(1A) of the Act was not justified. (5) For that the order passed by the Ld. Commissioner of Income-tax (Appeals) is otherwise erroneous on facts as well as in law and is liable to be cancelled." 3. Rival contentions have been heard and record perused. Facts in brief are that the assessee is a partnership firm carrying on the professions of advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contended by the learned AR Shri Ajay Vohra that the services rendered by M/s. Khaitan Services Ltd. did not involve any work or supply of any labour, nor were the said services covered by the specific services referred to in section 194C of the Act. He further drawn our attention to the fact that M/s. Khaitan Services Ltd. did not have any employees nor did they engaged any contractor to do any work for the assessee, but they only provided bureau and office services and related facilities as a passive services provider and not an active work performer doing any specific work for the assessee. Our attention was drawn to the audited Balance Sheet and Profit Loss Account placed in the record, in which no expenses on account of wages or salary for manpower was debited. He also relied on the decision of SRF Finance Ltd. v. C.B.D.T. [1995] 211 ITR 861 (Delhi) and V.M. Salgaocar Bros. Ltd. v. ITO [1999] 237 ITR 630 (Kar.). He, further submitted that keeping in view the nature of services rendered, the amount paid by the assessee does not attract the provisions of section 194C and accordingly lower authorities were not justified in invoking the provisions of section 201 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent or item-wise activity and, therefore, this was not covered under any provisions regulating TDS. The Assessing Officer did not agree with the arguments given by the assessee. After referring the judgment of Supreme Court of India in the case of Associated Cement Co. Ltd. v. CIT [1993] 201 ITR 435 in which it was held that the term any work in the provisions of section 194C meant any and not only a work contract , he determined short deduction of tax and charged interest thereon. 8. As per our considered view, the provisions of section 194C are attracted only where any sum is paid for carrying out any work including supply of labour for carrying out any work. Thus, "carrying out any work" is the substance for making the payment relating to such work, liable for deduction of tax at source under section 194C of the Act. For carrying out any work, manpower is sine quo non and without man power it cannot be said that work has been carried out. Under section 194C each and every work/service is not covered, hence the nature of work done or service performed is required to be seen. In the instant case, the package of facilities so provided, included the office space comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut work that is why the Parliament thought it expedient to expand the meaning of the word "work" by including in it the supply of labour. Thus, it is obvious that because word "work" would not include within its amplitude the supply of labour, the Parliament added the same by including the latter in the former thereby giving the word "work" an extended meaning. The extended meaning cannot travel beyond the extended area; Parliament has stressed the scope of word to some extent only. Hon ble Karnataka High Court in case of V.M. Salgaocar Bros. Ltd. v. ITO [1999] 237 ITR 630 , have referred to the decision of Hon ble Supreme Court in case of Associated Cement Co. Ltd. v. CIT [1993] 201 ITR 435 and after analyzing the same, it was held that judgment of the Hon ble Supreme Court, does not apply in respect of cases where no work is performed and no labour is supplied, and even after the amendment made in the year 1995 in the Income-tax Act, 1961, only the specified services have been covered but it did not expand the area to cover all the work/services where no work is performed. The word "work" in section 194C referred to and comprehends only the activities of workman. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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