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2017 (3) TMI 973 - AT - Income TaxTDS u/s 194C - disallowance u/s 40(a)(ia) - non deduction of tds - Held that:- The assessing officer has assumed that these labourers were supplied by alabour contractors whereas stand of the assessee was that it itself employed all the labourer. It has handed over the labour payments to one or two person on the site who will disburse among the labourer. The assessee has not availed services of any labour contractors therefore, it was not required to deduct TDS. We could have appreciated the case of revenue, if assessing officer has inspected the site or record statement of labourers for establishing the facts that they worked at the site of assessee through some contractors but no such step was taken by the assessing officer,inspite of direction given by theCIT(A). Under these circumstance,the Ld.CIT(A) has deleted the addition and we do not see any reasons to interfere in the order of the CIT(A). - Decided in favour of assessee Addition u/s 68 - Held that:- The assessing officer disbelieved existence of contractor/sub-contractor relationship between it and M/s. Hemani Enterprises. However, he has not assigned any reasons why he has disbelieved it. The assessee supplied complete addresses, bank details, PAN and mobile no. of Shri Manoj Bhai Gohil who is the proprietor of M/s. Hemani Enterprises. The Ld. first appellant authority has observed, if assessing officer has any doubt he should have disbelieved the total contract payment made to him, why the outstanding only. The assessee was awarded contract by Canal Division of R&B department under the tender. It has executed the contract through M/s.Hemani Enterprises, if the line of action adopted by the assessing officer is being upheld, than the profit in this contract would be very abnormal because in a contract of having value of ₹ 2,17,02,016/- a some of ₹ 72,88,879/- is being treated as a profit than the ratio of profit would quite high in a Civil Construction work.AO ought to have considered that a contract given by a Govt. agency was completed and payment was made by Canal Division of Govt. department. In such situation the activities cannot be held as bogus. - Decided in favour of assessee
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