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TMI Blog2012 (5) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee raised the ground with regard to confirming the order passed by the assessing officer treating the assessee at default under sections 201(1) and 201 (1A) of the Act read with section 154 of the Act. Brief facts of the case are that the assessee company is engaged in the business of civil contract works. A survey under section 133A was conducted in the case of the assessee on 17-2-2004. Subsequent to the survey, necessary enquiries and investigation was conducted by the TDS Authority and the assessee was found to be a defaulter in respect of payment of interest attracting the provisions of section 194A of the Act, payment to sub contractors and labour payments attracting the provisions of section 194C of the Act and payment of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,755 Rs. 6,60,145 Thus, a total demand for short deduction under section 201(1) amounting to Rs.20,75,880/- and consequential interest u/s 201(1A) of Rs.6,65,575/- was raised. Subsequently, the said order has been rectified by the assessing officer vide order under section 154 of the Act dated 16-12-2005 wherein, the short deduction under section 201(1) and 201(1A) was worked out after verification of the tax paid by the assessee. Accordingly, the assessing officer worked out a total demand of Rs,26,91,845/- comprising of short deduction under section 201(1) amounting to Rs.20,75,880/- and interest under section 201(1A) amounting to Rs.6,15,965/-. Being aggrieved by the order of the assessing officer, the assessee went in appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 central, state or provincial Act and an institution declared to be a university u/s 3 of the UGC, 1956 (3 of 1956) or j) Any firm or (k) any individual or an HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under cl.(a) or cl.(b) of S.44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to be account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'sub contractor'. In the present case, because of an agreement between the assessee and the maistry the payment was made for supply of labour for carrying out the work for the benefit of the assessee. Thus, the assessee cannot shirk from its liability of deduction of tax. Further, the word 'contractor' for the purpose of these provisions would be any person who enters into a contract with the central or any state govt or any local authority, any corporation established b or under a central, state Provincial Act, any company or any cooperative society for carrying on any work including supply of labour for carrying out any work and a 'subcontractor' would mean any person who enters into a contract with the contractor for carrying out, or fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conclusion that the payments was made for supply of labour for carrying out the work of the assessee. Where any work is carried out by supplying the manpower, the provisions of section 194C is attracted. In the present case, it is not the case of the assessee that the payment is not related to the supply of labours. Nothing has been brought on record to the effect that manpower was not provided by the maistries himself. In view of this matter, in our opinion, the CIT(A) is justified in confirming the order of the Assessing Officer. This ground of the assessee in both the appeals is dismissed." 5. The learned authorised representative of the assessee submitted before us that the assessing officer and the CIT failed to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labour turnover in such projects is very high. According to the assessing officer, the assessee could not have made the payment to each individual labour who is its employee and instead of paying them directly, the amounts were paid to the middlemen. After considering the facts and the circumstances of the case, we are of the opinion that the assessing officer is required to examine the assessee's cash book and find out whether the assessee has directly paid the amounts to the individual labourers or the same was paid through the mastri. If the assessee paid the said payments to the individual labour, then the assessee is not liable to deduct TDS under section 194C of the Act, otherwise the assessee is liable to deduct TDS u/s 194C of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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