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2015 (10) TMI 2320 - AT - Income TaxTDS u/s 194C - TDS on the amounts paid to the sanitation contractors - AO held that the TDS was deductible on such payments and for failure to deduct the TDS, assessee is in “assessee in default” u/s 201(1) and is also liable to pay interest u/s 201(1A) - whether the SHGs can be called as contractors - Held that:- The GHMC has engaged and issued the poceedings in favour of the SHGs by lots and work has been allotted per unit by fixing the wages per person and also specifying the number of workers to be engaged for each unit and per shift. The working hours of the workers as well as the shifts are also specified in the notification. From the bills paid to the SHGs also, it is seen that the payment is made on the basis of number of mandays and wages per day and is not a fixed amount per month. Thus, it is clear that the allotment of work by the assessee to the SHGs is not by way of contract but is engagement of workers for a fixed period. The workers are being paid as per the agreed terms and conditions and the aggregate amount is paid to the group and not to any particular person. Therefore, as rightly held by the CIT (A), there is no contractor contractee relationship but is more in the nature of employee employer relationship as the assessee is also making contributions to the EPF and ESI and as rightly pointed out by the ld CIT (A), the payments made to an individual is not exceeding the prescribed limit u/s 192 of the I.T. Act, the TDS provisions are not applicable to the facts of the case before us - Decided in favour of assessee.
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