TMI Blog2012 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... workman relationship with the assessee, and the payments being made by the assessee to CDLB being not in the nature of 'payment for supply of labour' - Appeal is allowed by way of remand to CIT(A) - IT Appeal No. 199 (Kol) of 2010 - - - Dated:- 17-2-2012 - PRAMOD KUMAR, MAHAVIR SINGH, JJ. Niraj Kumar for the Appellant. Samir Chakraborthy and Abhijit Biswas for the Respondent. ORDER Parmod Kumar, Accountant Member By way of this appeal, the Assessing Officer has challenged correctness of learned Commissioner (Appeals)'s order dated 18th November 2009, in the matter of assessment under section 143(3) of the Income Tax Act, 1961) for the assessment year 2006-07. 2. Grievances raised by the Assessing Officer, as set out in the memorandum of appeal in the form of questions, are as follows: 1. For that, on the facts and in the circumstances of the case, whether the learned CIT(A)-VIII, Kolkata is correct in treating that there is no contractual relationship between assessee and Calcutta Dock Labour Board. 2. For that, on the facts and in the circumstances of the case, whether the learned CIT(A)- VIII, Kolkata, is correct i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was that as per the provisions of the Calcutta Dock Labour Workers (Regulation of Employment) Scheme 1970, the company is a 'registered employer' and for working in any vessel and/ or other related work, it is required to employ the workers enlisted with Calcutta Dock Labour Board, and pay the said Board the legitimate dues of the 'registered workers' for carrying out of various work relating to assessee's business . It was thus contended that Calcutta Dock Labour Board is, therefore, a conduit pipe between a 'registered employer' and 'registered workers' . Upholding the grievance of the assesse, and after extensively reproducing from the written submissions filed by the assessee, learned CIT(A) opined as follows: In this ground , the appellant is disputing Assessing Officer's (AO's) action in adding back labour payments made to Calcutta Dock Labour Board on the ground that tax has not been deducted at source, inter alia , claiming that Section 40(a)(ia) is not applicable to it. The judgment of jurisdictional High Court which has been brought on record by the appellant, to delineate the position of Calcutta Dock Labour Board vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments in question. Section 194 C is reproduced below for ready reference: 194C - Payments to contractors. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to- ( i ) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family; ( ii ) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein. (2) Where any sum referred to in sub-section (1) is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or ( g ) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or ( h ) any trust; or ( i ) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or ( j ) any Government of a foreign State or a foreign enterprise or any association or body established outside India; or ( k ) any firm; or ( l ) any person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, if such person,- (A) does not fall under any of the preceding sub-clauses; and (B) is liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not stipulate the existence of a written contract as a condition precedent for (invoking the provisions of Section 194C with respect to) payment of TDS . The CDLB has received payment for supply of labour, and, normally one would proceed on the basis that there was a contract for supply of labour between the assessee and CDLB. The CIT(A)'s stand is that infact CDLB is an agent of the stevedores like assessee before us, and the real employer is the assessee himself, and, according to the learned CIT(A), the authority for this proposition is contained in two judgments cited in his order - namely Calcutta Dock Labour Board ( supra ) and Visakhapatnam Dock Labour Board ( supra ) . Undoubtedly, these decisions do indicate that there is a workman employer relationship between the dock workers and the stevedores like assessee when they employ those workers, but be that as it may, the fact remains that the assessee has made payments to the CDLB for supply of these workers. As long as the assessee has made payments to the CDLB for supply of labour, even when this labour may be treated as employed by the assessee for all practical purposes, the provisions of Section 194 C ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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