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2014 (8) TMI 1069 - AT - Income TaxReopening of assessment - non-deduction of TDS on payment made to the contractors for the labour contract work - Held that:- A mere production of the books of account or documents or other evidences is not sufficient for making assessment. If the Assessing officer is unable to examine those documents and to discover the understatement of income by relying on the same documents, the Assessing officer could re-open the assessment on the basis of fresh material which came to the knowledge of the Assessing officer that the income has escaped assessment. Therefore, merely because material lies embedded in the material or evidence produced by the assessee, which the Assessing officer could have uncovered but did not uncover is not a good ground to cancel the re-assessment proceedings. The Assessing officer could have found the truth, but he did not, does not preclude the Assessing officer from exercising the power of re- assessment to bring to tax the escaped income. In the present case, as seen from the reasons recorded, there is prima facie escapement of income. Hence, the Assessing officer after recording the reasons, issued notice to the assessee u/s. 148 of the Act. TDS u/s 194C - non deduction of tds - nature of contract - Held that:- Chapter V of the Indian Contract Act treats certain relations resembling those created by a contract as contracts enforceable in law. The Indian Contract Act thus envisages four types of contracts, namely, (1) contracts made in writing, (2) contracts made orally, (3) contracts by implication or implied contracts and (4) quasi contracts. Thus, the contracts envisaged by section 194C are not limited to written contracts alone; they include oral contracts and implied contracts also. All payments made in pursuance of a contract irrespective of whether it is a written contract, oral contract, implied contract and quasi contract are well covered by section 194C of the Income Tax Act. The case of the assessee falls within the aforesaid parameters. Provisions of sub-section (2) of section 194C also apply to an individual whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the relevant financial year. Total sales, gross receipts or turnover from the business or profession carried on by the assessee in the year under appeal exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the relevant financial year. Total sales, gross receipts or turnover from the business or profession carried on by the assessee in the year under appeal exceed the monetary limits specified under clause (a)or clause (b) of section 44AB. It is for this reason that the assessee has filed tax audit report as required by section 44AB. In this view of the matter, the provisions of section 194C(2) apply with equal force to him and the assessee is liable to deduct TDS on the impugned payment - Decided against assessee
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