TMI Blog2011 (4) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... ether for the sake of convenience. 2. The first two grounds in ITA No.1198/H/2007 raised by the assessee are as follows: 1. The CIT(A) erred in holding that there is short deduction of tax u/s 194A and further erred in confirming the charging of interest of ₹ 18,055/- 2. The CIT(A) erred in holding that there is short deduction u/s 194C in respect of job work charges and further erred in confirming the charging of interest of ₹ 71,526/-. 3. The above two grounds were not pressed by the assessee before us and hence dismissed as not pressed. 4. The next ground raised by the assessee in ITA No.1198/H/2007 is that the CIT(A) erred in holding that there is short deduction of tax u/s ITA No.1198 1199/H/2007 Srinivasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labourers, identified as a group leader, through whom periodical payments to labour are made considering which the assessee company had not deducted any TDS on these payments. The contention of the assessee company is not accepted by assessing officer for the reason that the projects of this nature being labour intensive require large number of labourers and the companies/firms, themselves, cannot mobilise such large numbers on their own and exercise control over them as labour turnover in such projects is ITA No.1198 1199/H/2007 Srinivasa Civil Works P Ltd., Hyd. very high. In view of these difficulties, this job of mobilisation of labour is assigned to labour contractors. It is cast upon the labour contractors to make payments, to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the labour payment made to the mastries will come under the purview of section 194C of the IT Act and having failed to do so, the assessee firm has been rightly treated as an assessee in default u/s 201(1) and 201(A) of the Act. Against this, the assessee is in appeal before us. 8. We have heard both the parties on this issue. The section 194C reads as follows: 9. To settle the controversy involved herein, it is necessary to know about the provisions of section 194C of the IT Act. Payments made to contractors and sub contractors: (1) Any person responsible for paying any sum to any resident (hereinafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier, deduct an amount equal to i) One percent in case of advertising ii) Any other case two percent, of such sum as income tax on income comprised therein. 10. The Hon ble Supreme Court in the case of Birla Cement Works Vs. CBDT (2001) 248 ITR 216 (SC) has laid down the conditions precedent for attracting the provisions of section 194C of the Act viz., (1) there must be a contract between the person responsible for making payment to contractor (2) the contract must be for carrying out of any work, (3) the work is to be carried through the contractor (4) the consideration for the contract should exceed ₹ 10,000/ (20,000)- i.e. the amount fixed by sub. sec. 194C and (5) that the payment is made to the contractor for the work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or partly and labour which the contract has undertaken to supply in terms of his contract with any of the aforesaid authorities. We find, in the present case, the controversy is regarding the payments made for disbursement of labour charges to maistries. The main contention lf the assessee s counsel is that there is no contract between the assessee and the maistries and it cannot be said to be labour contractors within the meaning of the provisions of section 194C . According to him, there is no requirement in law to deduct tax at source by the assessee under the provisions of section 194C of the Ac and he placed reliance on the order of the Tribunal in the case of Samanwaya Vs. ACIT (34 SOT 332 (Kol. On the other hand, the DR placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X
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