TMI Blog2015 (2) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... se auditors vague remarks cannot be construed as a conclusive statement. This is the job of AO to peruse the facts, circumstances and material in entirety and not to resort to piece meal observations. In view of the above, we find no infirmity in the order of CIT(A) holding that assessee was not liable to deduct TDS u/s 194 C, his order on merits is upheld. Since we hold that there is no liability u/s 194C there is no violation of sec. 40 a (ia), there is no need to adjudicate about the Merylin shipping issue [2012 (4) TMI 290 - ITAT VISAKHAPATNAM]. - Decided against the revenue. - IT APPEAL NO. 960 (JP.) OF 2011 - - - Dated:- 31-10-2014 - R.P. TOLANI AND T.R. MEENA, JJ. For The Apppellant : Rajesh Ojha For The Respondent : Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... casual laborers by the assessee. During the course of assessment proceedings, the AO was of the view that the amounts paid by the assessee to the casual laborers were liable for TDS u/s 194C(3). According to AO assessee became the contractor and the casual workers became the sub-contractor and on payment to such sub-contractors assessee ought to have deducted TDS @ 1%. Due to non-deduction and payment of such TDS, the amounts paid by the assessee in this behalf were disallowed u/s 40(a)(ia) of the Act. 2.2 Before the ld. CIT(A) in first appeal, the assessee made the following submissions:- (a) The assessee had been awarded work orders from his clients and it was stipulated that the assessee could not further sub-contract the work. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. (d) The ledger accounts of team leaders/ skilled workers were opened for convenience as it saved the assessee from the hassle of opening of hundred of account of individual labourers. The main contention of the appellant is that though the payments were made to the specified persons termed as team leader or skilled workers, but the above mentioned payments were on account of a group of persons working alongwith these team leaders/ skilled workers. (e) The allegation of the AO that vouchers produced by the assessee were in the nature of an afterthought only, was totally preposterous. The Auditors had mentioned in next audit report (Para 9(b)) while reporting the list of books of accounts examined by them that the vouchers were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mother India Refrigerator Industries (P.) Ltd. [1985] 155 ITR 711 2.4 Ld. CIT(A) vide detailed order, deleted the addition by holding :- (i) that the provisions of Section 194C and Section 40(a)(ia) of the Act were not applicable. (ii) besides the Section 40(a)(ia) of the Act was applicable to the amount outstanding at the end of the year in view of the ITAT special Bench decision in the case Merilyn Shipping Transports v. Asstt. CIT [2012] 136 ITD 23 and ITAT Jaipur Bench decision in the case of Jaipur Vidyut Vitran Nigam Ltd. (supra) 2.5 Aggrieved, the Revenue is before us. 2.6 The ld. DR contends that reliance placed by the ld. CIT(A) on the cases of Merilyn Shipping Transports (supra) (SB) and Jaipur Vidyut Vitran N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has made a mention that no TDS is deducted and paid during the year for the payment made to labour charges. If the payment for casual workers were made then the assessee's own C.A, would have not given this remarks. The order of the AO is relied on. 2.7 The ld. Counsel for the assessee in reply contends that:- (i) Though the SB judgment in the case of Merilyn Shipping Co has been reversed by Honble Calcutta high Court, however the subsequent amendment brought in sec 40 a (ia) is prospective in nature. Thus in the relevant period the Merilyn Shipping judgment is applicable. (ii) As provided by the contract with M/s Next Retail India assessee was expressly debarred from employing any sub contractor. Thus the possibility of empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance and intricacies of work. (vii) There is no observation by auditors that there was any sub contract which attracted liability to pay TDS on such wages. They have only mentioned that there is no TDs payment on wages. A simple statement of harmless fact cannot be assumed by the AO as conclusion of liability for TDS. 2.8 We have heard the rival contentions and perused the material available on record. From the facts mentioned above it clearly emerges that by main contract with Principal Next Retail India assessee was barred by hiring any subcontractor. We are unable to subscribe to the AOs view that as the labourers were orally employed or the salaries were disbursed through senior workman constitute adverse facts to lead to a conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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