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2011 (4) TMI 874 - AT - Income TaxPayments to contractors - supply of material - Non deduction of TDS - assessee had incurred expenses for cutting of trees to the tune of more than Rs.2 crores - Held that:- It may be seen that the contractor not only paid compensation to the owners but also carried out the work of cutting, transporting and block of cut wood and as such there was involvement of work and labour which attracts the provisions of section 194C - The assessee's contention is lacking conviction as had the removal of trees and destruction of standing crops being an isolated incident while installing of a tower, it would have been without any iota of hesitation, accepted the theory of the assessee, however, the amounts paid towards cutting of trees were running into crores of rupees which unambiguously exhibit the enormity of trees have been removed to facilitate for installation of towers and also subsequent hauling of uprooted trees to the storing places of the assessee. These twin works have been executed by the contractors on behalf of the assessee. In such an event, one could safely infer that the assessee had required, rather assigned the contractors to pay compensation to the farmers for losing of their trees/crops etc., and for removing and carting of the logs to its storing places. The assessee had neither in the course of proceedings before the AO nor before the FAA came up with the details of compensation of amounts so paid to the farmers. Even at the time of hearing before this Bench, the assessee had not come up with any details and the quantum of compensation so paid to the farmers. Thus in view of the above this issue should go back on the file of the AO for fresh consideration with specific directions to the effect that in respect of compensation paid; two issues were interlinked compensation amounts for loss of trees/crops and removal of trees and allied works executed by the respective contractors. Survey work - assessee contented that survey work fall within the ambit of 'professional service'. - Held that:- The survey work undertaken by the assessee does fall within the ambit of 'professional service' as the assessee's argument was not backed with any documentary evidence to suggest that it had, in fact, incurred an expenditure to the extent of Rs.17,08,766/- only. The case relied on by the assessee is rather misplaced and cannot be of any help to the assessee - Appeal is partly allowed
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