TMI Blog2016 (8) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... y deleted the additions made by the A.O. We do not see any error or infirmity in the order of the CIT(A). Hence, we inclined to upheld the CIT(A) order and reject the appeals filed by the revenue. - I.T.A.Nos.36&37/Vizag/2014, C.O. Nos.25&26/Vizag/2014 - - - Dated:- 22-7-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri M. Bhupal Reddy, DR For The Respondent : Shri P. Bala Srinivas, AR ORDER PER G. MANJUNATHA, Accountant Member: These appeals filed by the revenue and cross objections filed by the assessee are directed against separate, but identical orders of CIT(A), Vijayawada dated 11.11.2013 for the assessment year 2010-11 2011-12. Since, the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to explain why the assessee shall not be treated as assessee in default u/s 201(1) and 201(1A) of the Act. In response to show-cause notice, the assessee has filed a written submission dated 30-03-2011 and contends that the nature of work entrusted to contractors is a mere supply of labour for execution of work as defined under sec. 194C of the Act, accordingly the payments are covered under sec. 194C and it has rightly deducted TDS u/s 194C of the Act. The assessee further submitted that it has followed the guidelines issued by Central Govt. from time to time including that of the form, method and manner of agreement and the rates of TDS under such agreements. It was further submitted that the agencies were entrusted the work of Toll Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the instant case are found to be falling within the definition of commission as mentioned in section 194H. Therefore, held that the assessee as an assessee in default under sec. 201(1) and 201(1A) of the Income Tax Act 1961 and computed short deduction of tax and interest. 5. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before A.O.. The assessee further submitted that the A.O. resorted to general provisions of laws under the contract Act and other enactments and has selectively chosen to analysis about the works contract and principle to principle argument and principle to agent argument to suit his convenience and le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee submitted that the issue involved in these appeals is squarely covered by the decision of ITAT, Visakhapatnam bench in assessee s own case for the assessment year 2009-10. The A.R. further submitted that the ITAT, held that the contract between the assessee and the contractors is a mere contract for supply of labour for execution of work, having all the ingredients of a contract of principal to principal basis and accordingly, the assessee has rightly deducted TDS @ 2.266% under the provisions of section 194C of the Act. 7. On the other hand, the Ld. D.R. strongly supported the assessment order. 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission is paid in terms of value of transaction, whereas in the instant case consideration is paid in terms of remuneration payable to the personnel deployed in to the work plus service charge of 14% on the total remuneration payable to the personnel employed. Therefore, we are of the view that the contract between the assessee and the agencies is a mere contract for supply of labour for execution of work contract as defined under the provisions of sec. 194C, but not a contract of agency as defined under sec. 194H of the Act. We further observed that on perusal of the nature of work and contract between assessee and agencies, there is no element of contract in the nature of principle to agent so as to invoke the provisions of sec. 194H of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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