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TMI Blog2012 (10) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case, ld. CIT(A) was not justified in directing to delete amount of Rs. 8,15,000/- added u/s. 40(a)(ia) as the assessee failed to make any TDS u/s. 194-I of the I.T. Act on payment hire charges. (4) In the facts and circumstances of the case, ld. CIT(A) was not justified in confirming only Rs. 88,900/- out of disallowances of expenditure of Rs. 10,37,500/- on slurry removal expenses though the assessee has failed to file any evidence. (5) In the facts and circumstances of the case, ld. CIT(A) was not justified in confirming only Rs. 76,500/- out of Rs. 12,90,370/- disallowed by the AO as no TDS was made on payment of repairing charges and maintenance." 3. Shri L.K.S. Dehiya, ld. D.R. represented on behalf of the Revenue and Shri S.K. Tulsiyan, ld. counsel appeared on behalf of the assessee. 4. It was submitted by the ld. D.R. on behalf of the Revenue that the assessee is a civil contractor doing the business of construction. It was the submission that the assessee has construction activities at various projects at various sites. It was also the submission that in the course of assessment, it was noticed that the assessee has claimed labour pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loying labourers directly and the payments had been made to the sub-contractors, who had provided the assessee with the labourers. It was the submission that as the assessee had not deducted TDS on the payments to the sub-contractors, who had supplied the labourers, as per the provisions of section 194C of the Act, the Assessing Officer was right in invoking the provisions of section 40(a)(ia) of the Act and disallowing the said labour charges. It was the submission that the ld. CIT (Appeals) erred in deleting the said addition. It was, however, fairly agreed that no amount was due to the labourers as on the end of the financial year and the issue in the appeal is squarely covered by the decision of the Special Bench of this Tribunal in the case of Merilyn Shipping & Transports v. Addl. CIT [2012] 136 ITD 23. 5. In reply, ld. A.R. submitted that violation of the provisions of the Provident Fund Act does not affect the proceedings under the Income Tax Act. It was the submission that if there was any violation of the provisions of the P.F. Act, it was for the P.F. authority to take action against the assessee, it would not lead to disallowance of an expenditure or finding that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious sites, only one person allegedly to be supervisor had been produced for examination. It was the submission that no evidence had been produced before the Assessing Officer and even in the remand proceedings, all evidences have not been produced. It was the submission that the order of the ld. CIT (Appeals) was liable to be reversed. On a specific query by the Bench as to why the decision of the Hon'ble jurisdictional High Court in the case of CIT v. Stumm India [IT Appeal No. 127 of 2009 dated 16.08.2010], wherein it had been held that when the payments are made to the individual labourer through supervisor, who was also employed by the assessee is not liable for TDS under section 194C and consequential disallowance under section 40(a)(ia) could not be made was put to the D.R, it was submitted that the unreported decision of the Hon'ble High Court cannot be held to be having binding value over reported decision. It was also submitted that the facts in relation to the said decision of the Hon'ble jurisdictional High Court had not been given to the ld. DR for his rebuttal, therefore, the same should not be followed. As this decision has not been given to the ld. DR it was fairl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act. This is just the reason why the Explanation 1 to section 37 has been brought in. Assuming, the supervisor Anant Ray, who appeared, was not a supervisor. Such witness has not been dislodged as the statement has not been shown to be wrong. That he has built a house worth Rs. 5 lakhs does not go against the said Anant Ray as if this is to be expected, no labour in the country can own a house. The assessee has produced the evidences. Such evidences might not be to the satisfaction of the Assessing Officer, but what is to be kept in mind is that such evidence has not been found to be false. It has only been presumed to be wrong. It might also be found incomplete still this submission of the assessee that the payments were made directly by the assessee to the employees/labourers through the supervisor, does not stand dislodged. In these circumstances, we are of the view that the finding of the ld. CIT (Appeals) on this issue on merits is on a right footing and does not call for any interference. 9. In Regard to Ground No. 2, at the time of hearing, ld. D.R. vehemently supported the order of Assessing Officer. In reply, ld. AR submitted that this ground is misconceived and does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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