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2013 (5) TMI 502 - AT - Income TaxNon-deduction of TDS u/s 194C(2) - disallowance u/s 040(a)(ia) - payments made to the labourers through the Sardars/Munshis of each group of daily labourers whose total payments for each of them are below Rs.50000/- - CIT deleted the additions - assessee is a Civil Contractor filed return of income claiming deduction u/s 80P being a cooperative society - Held that:- The claim made by the assessee on the total turn over amounting to Rs.35,90,188/- was when the labour charges were paid by the assessee were claimed at Rs.24,57,947/- were considered specifically for the sardars who were to identify the labourers being paid less than Rs.50,000/- each was acceptable to the authorities below. It cannot be considered for disallowance u/s 40(a)(ia) to identify the deduction of tax at source u/s 194C in so far as it cannot be said that the sardars are to be subjected to deduction of tax at source only on part of their payments to the labourers whom they have identified. The authorities below therefore have not been able to establish the issue raised for disallowance u/s 40(a)(ia), in so far as, the provision of section 194C do not apply to the payments/expenditures incurred by the assessee. No hesitation in directing the AO to delete the disallowance - In favour of assessee.
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