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2016 (3) TMI 721 - AT - Income TaxTds u/s 194C - non deduction of tds on hamali charges paid to daily labourers employed by the assessee - assessee submitted that it has not deducted TDS, because there is no written contract entered into between any individual and the payment is made to individual labouers, therefore, no disallowance can be made by invoking the provisions of 40(a)(ia) - Held that:- On verification of the ledger accounts, it was noticed that the assessee has made the payments on weekly basis towards wages payments to the daily workers employed in the factory. The assessee made the payments through the mestri, just because for it is convenient and also this has two advantages i.e. it is the responsibility of the mestri to provide labour to the management on one hand and on the other hand, it is convenient to the assessee instead of dealing the whole lot, the assessee could deal with a single person. This is a recognized system followed everywhere, where there in unskilled work force. Just because the payments are made through the mestri, the A.O. was not correct in coming to the conclusion that there exist written or oral contract for supply of labour which attracts the provisions of section 194C of the Act. There is no contract between the mestri and the assessee, as such these payments are not covered under the provisions of section 194C of the Act, therefore the A.O. was not correct in disallowing the amounts by invoking the provisions of section 40(a)(ia) of the Act. The CIT(A) after considering the relevant details and submissions of the assessee deleted the additions made by the A.O. We do not find any error or infirmity in the order passed by the CIT(A). Hence, we inclined to upheld the order passed by the CIT(A) and direct the A.O. to delete the additions. - Decided in favour of assessee Addition made towards credits in capital account - CIT(A) deleted the addition - Held that:- On perusal of the ledger account copies, we find that most of the transactions were done in cash. Though assessee claimed to have furnished the relevant details before the A.O. with regard to the sources for the credits in capital account, the A.O. could not had an occasion to verify the same, because the books of assessee were not available at the time of assessment. It is an admitted fact that the books of assessee were not before the A.O. to verify the sources of the credits in capital account. Unless, the A.O. satisfied himself about the source with reference to assessee books of account, he cannot came to a conclusion that the sources for the credits were satisfactorily explained. Therefore, we are of the opinion that to meet the ends of justice, we deem it proper to remit the issue back to the file of the A.O. and direct the A.O. to verify the details filed by the assessee with regard to the sources for the credits in capital account and pass appropriate orders as per law. - Decided in favour of revenue for statistical purposes.
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