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2015 (10) TMI 2320 - ITAT HYDERABAD

2015 (10) TMI 2320 - ITAT HYDERABAD - TMI - TDS u/s 194C - TDS on the amounts paid to the sanitation contractors - AO held that the TDS was deductible on such payments and for failure to deduct the TDS, assessee is in “assessee in default” u/s 201(1) and is also liable to pay interest u/s 201(1A) - whether the SHGs can be called as contractors - Held that:- The GHMC has engaged and issued the poceedings in favour of the SHGs by lots and work has been allotted per unit by fixing the wages per per .....

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orkers are being paid as per the agreed terms and conditions and the aggregate amount is paid to the group and not to any particular person.

Therefore, as rightly held by the CIT (A), there is no contractor contractee relationship but is more in the nature of employee employer relationship as the assessee is also making contributions to the EPF and ESI and as rightly pointed out by the ld CIT (A), the payments made to an individual is not exceeding the prescribed limit u/s 192 of the .....

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for the A.Ys 2009-10 and 2010-11 respectively against the order of the CIT(A), Vijayawada, dated 20.12.2013, in deleting the demand raised by the AO u/s 201 and 201(1A) of the I.T. Act. 2. Brief facts of the case are that the assessee is a Municipal Corporation. The assessee was deducting the TDS u/s 194C in respect of all contract payments as per the rates applicable. However, during the year under consideration, the GHMC Municipal Commissioner issued a circular on 12.11.2008 directing the DDO .....

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nd not on the profit margin of the contractors. Assessee was therefore, requested to furnish the details of the gross amount paid to the sanitation contractors on which the TDS is not deducted or the TDS is deducted at a lower rate. Accordingly the assessee filed details of the amount on which the TDS is not deducted. After considering the details furnished by the assessee, AO held that the TDS was deductible on such payments and for failure to deduct the TDS, assessee is in assessee in default .....

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oyer relationship governed by section 192 of the Act. Against the relief given by the CIT (A), Revenue is in appeal before us. 4. The ld DR, supporting the orders of the AO, submitted that the GHMC i.e. assessee herein has been outsourcing the sanitation work and has been awarding the contracts to the self help groups in Andhra Pradesh and therefore, the payments made to the SHGs are nothing but contract amount liable for deduction of tax at source u/s 194C of the Act. He submitted that due to f .....

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t made to any contractor for the work. The ld Counsel for the assessee has filed before us paper book which consists of proceedings of the assessee alloting the work to various SHGs and the bills for payment of wages to the workers for the months of May, 2009 to demonstrate that the payments were wages only and also the assessee s contribution to EPF and ESI and there was no profit element in any contract. The ld Counsel further submitted that the AO had made a similar disallowance in the case o .....

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