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2012 (9) TMI 575 - AT - Income TaxTDS u/s 194C on sub-contractor - Assessee get work contract for Construction of roads & bridges – Assessee deduct TDS on subcontract of supply of labour @ 1.2% - AO disallow the same because assessee fail to substantiate that work was sub contract – Held that:- As per Sec. 194C, sub-contractor would means a person who enters into a contract with the Contractor for carrying out or for supply of labour for carrying out whole or part of work undertaken by the contractor. Therefore it is clear from the above provision that person supplying the labour is a sub-contractor. And assessee applies TDS rates as per Law. Decision in favour of assessee TDS u/s 194C – Assessee is engage with person for supplying of Bitumen to hot mix plant assessee's site – Assessee consider the same as sub-contractor for the purpose TDS and deduct the TDS @ 1.2% - Held that:- As they are not involved in execution of any part of the contract which was taken by the assessee and accordingly the assessee should have deducted full tax @ 2% from this party. However, at the same time it is also required to be verified whether the payments were made to this party or they are still payable because the Special Bench of the Tribunal, in case of Merilyn Shipping & Transport (2012 (4) TMI 290) has already taken a view of Sec. 40(a)(ia) would be applicable only if the amount remains payable. Therefore case remand back to AO. Delay in deposit of Employees Provident Fund – AO disallows the amount on account of delay in deposit of EPF on due date as per Sec. 36(1)(va) - Held that:- Payment were made with in grace period of 5 days after due date. Therefore, the same would be allowable on the basis of decision given by Punjab & Haryana HC in case of V. Lakhani Rubber Works (2010 (3) TMI 471). Decision in favour of assessee Disallowance u/s 40(a)(ia) – Held that:- Following the decision of Tribunal in case of Merilyn Shipping & Transport(2012 (4) TMI 290) held that disallowance u/s 40(a)(ia) can be made only in respect of payments which remain payable at the end of the year. However, it is not clear from the record which payments have been made and which are payable, therefore, Case remand back to AO.
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