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Jiauddin Mollah Versus CIT. Kol-XVI

2016 (6) TMI 849 - CALCUTTA HIGH COURT

TDS u/s 194C - non deduction of tds on payment to contractors - Held that:- The persons engaged by the four mentioned persons were not sub-agents but they were working for the principal namely, the assessee in this case. 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. - Except for the four letters there wa .....

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a, JJ. For the Appellant : Mr. Malay Dhar, Adv For the Respondent :Mr. Aniket Mitra, Adv ORDER The Court : The appeal is directed against a judgment and order dated 15th January, 2010 passed by the learned Income Tax Appellate Tribunal, Bench-A, Calcutta pertaining to the assessment year 2006-07 allowing an appeal of the revenue. The aggrieved assessee has come up in appeal. The question formulated at the time of admission of the appeal reads as follows: Whether the learned Tribunal on the facts .....

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ceived payments aggregating to ₹ 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. In that view of the matter, the question is reformulated as above. Section 40(a)(ia) of the Income Tax Act, was applied for the purpose of disallowing an expenditure of a sum of ₹ 16,50,390/- paid by the assessee to the aforesaid four person .....

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ken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub-contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax on income comprised therein: [Provided that an individual or a Hindu undivided family, whose total sales, gross recei .....

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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 sh .....

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before his client can be roped in under Section 194C(2), the revenue has to establish that the assessee has entered into a contract with the aforesaid four persons for carrying out the whole or part of the work undertaken by the assessee. He submitted that there is nothing on the record to show that the assessee has assigned the work undertaken by him to the aforesaid four persons or to anyone of them. He added that there has to be an offer and acceptance before a contract can come into existenc .....

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him on account of wages to the mazdoors employed by him. b. Mabuda Faujdar wrote to the income tax officer stating a sum of ₹ 5,34,440/- was payable to him on account of wages out of which a sum of ₹ 4,83,175/- was paid and the balance sum of ₹ 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 ₹ 4,80,540 .....

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Those four persons were expressly or impliedly authorised by the assessee to name other persons to act on behalf of the assessee which is also contemplated under Section 194 of the Contract Act which provides as follows: 194. Relation between principal and person duly appointed by agent to act in business of agency.- Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such per .....

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ings against C & Co., for the recovery of the money. D is not a sub-agent, but is solicitor for A. The persons engaged by the aforesaid four persons were not sub-agents but they were working for the principal namely, the assessee in this case. 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) .....

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