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2016 (7) TMI 519 - ITAT VISAKHAPATNAMTDS u/s 194C OR 194H - nature of contract - whether the contract between the assessee and the agencies, is one for supply of manpower/labour for execution of works contract attracting TDS provisions of section 194C of the Act, or is the contract for agency attracting provisions of section 194H? - Held that:- The instant case consideration is paid in terms of remuneration payable to the personnel deployed in to the work plus service charge of 14% on the total remuneration payable to the personnel employed. Therefore, we are of the view that the contract between the assessee and the agencies is a mere contract for supply of labour for execution of work contract as defined under the provisions of sec. 194C, but not a contract of agency as defined under sec. 194H of the Act. As on perusal of the nature of work and contract between assessee and agencies, there is no element of contract in the nature of principle to agent so as to invoke the provisions of sec. 194H of the Act. It is merely a contract for supply of labour for execution of work contract as defined under sec. 194C, having all the ingredients of a contract of principle to principle basis. The assessee has rightly deducted TDS @ 2.266% under the provisions of sec. 194C of the Act. The CIT(A) has rightly deleted the additions. - Decided in favour of assessee
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