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TMI Blog2016 (6) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the circumstances of the case was justified in law in reversing the decision of the Commissioner of Income-Tax (Appeal) and upholding the addition of Rs. 16,50,390/- made by the Assessing Officer by invoking Section 194C(2) read with Section 40(a)(ia) of the Income Tax Act ?" Mr. Dhar, learned Advocate appearing for the assessee submitted that the question has to be reformulated because the real controversy is "whether the view taken by the learned Tribunal that the four persons who received payments aggregating to Rs. 16,50,390/-, acted as sub-contractor of the assessee is perverse ?" Mr. Mitra, learned Advocate for the respondent has not disputed that the correctness of the aforesaid finding is the subject-matter of the appeal. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to the account of the subcontractor, shall be liable to deduct income-tax under this subsection] [Explanation I.-For the purposes of sub-section (2), the expression "contractor" shall also include a contractor who is carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the Government of a foreign State or a foreign enterprise or any association or body established outside India] [Explanation II].-For the purposes of this section, where any sum referred to in sub-section (1) or sub-section (2) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um was paid by him on account of wages to the mazdoors employed by him. b. Mabuda Faujdar wrote to the income tax officer stating a sum of Rs. 5,34,440/- was payable to him on account of wages out of which a sum of Rs. 4,83,175/- was paid and the balance sum of Rs. 45,265/- was payable by the assessee. He added that he also had engaged mazdoors and part of the amount received by him was paid to them. c. Gafur Sardar wrote to the income tax officer stating that he collected a sum of Rs. 4,80,540/- from the assessee for payment to the mazdoors engaged by him. d. Samir Parui wrote to the income tax officer stating that he along with other labourers worked for the assessee and received a sum of Rs. 4,10,680/-. The letters go to suggest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. The payment made to those persons through the hands of the aforesaid four persons is a payment made directly by the assessee to those persons because well settled principles of law is that when one acts through another, he acts himself. C.I.T (Appeal) in his order opined as follows: "There is no evidence on record to prove that these persons are sub-contractors. In the absence of such evidence, the appellant's contention that the payments are made to these persons who are actual workers has merit. The provisions of sec.194C(1) are not applicable for the labour charges paid by the appellant. Since tax is not deductible, there is no contravention of sec.194C. The A.O. is not correct in disallowing the labour charges under section 40a(i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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