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2016 (11) TMI 879 - ITAT KOLKATA

2016 (11) TMI 879 - ITAT KOLKATA - TMI - TDS u/s 194C or 192 - non deduction of TDS on payment of wages to the labourers - nature of contract - Held that:- When a person is hired to be an employee, the person enters into a contract of service, which is an employer/employee relationship. Another type of contract between two parties is that of an independent contractor or a contract for service. This type of contract may be defined as a contract by which a person, contractor or service provider ma .....

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CIT(A). In our considered view the wages in the instant case are covered under section 192 of the Act. Therefore the provisions of section 194C are not applicable. In the instant case the payment has been made to the employees of the assessee. In view of above we do not find any reason to interfere in the order of ld. CIT(A). - ITA No. 559/Kol /2013 - Dated:- 21-10-2016 - Shri Waseem Ahmed, Accountant Member And Shri K. Narsimha Chary, Judicial Member By Appellant : Shri Dular Chand Mondal, JCIT .....

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Soumitra Choudhury, Ld. advocate appeared on behalf of assessee. 2. At the threshold it was noted that there is a delay of 28 days in filing the appeal by the Revenue. The Revenue has filed condonation petition in this regard stating the reason that the delay is occurred due to pendency of work load. Ld. AR for assessee raised no objection for condonation considering the delay. This, in our considered opinion and on the facts and circumstances of the case, the delay deserves to be considered. A .....

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turn of income disclosing income at ₹ 8,18,250/- comprising of profit under the head business and profession . Subsequently the case was selected for income escaping assessment u/s 147 of the Act and accordingly notice u/s. 148 of the Act was issued upon assessee. The assessment was framed u/s. 147/144 of the Act at a total income of ₹ 98,82,470/- by making certain disallowances. During the course of assessment proceedings, AO observed that assessee has paid labour charges amounting .....

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the Act are not attracted. Further, assessee submitted that the payment was made to the employees after deducting PF and ESI in respect of all the labourers. Considering the facts and circumstances, Ld. CIT(A) deleted the addition made by AO by observing as under:- 8. However, in the light of the remand report of the AO, which is reproduced above, it is found that the payments made on account of labaour charges were passed muster through PF & ESI account duly confirmed by the appropriate aut .....

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from whom deductions of PF & ES have been made in regular course, there was no relationship of contractor and contractee to attract provisions of sec. 40(a)(ia) r.w.s 194C(2) of the Act. therefore, the labaour charges claimed were nothing but wages paid to the employees as the cost of labour and in such circumstances, there is no scope to invoke provisions of sec. 40(a)(ia) of the Act. That being so, the disallowance made by the AO u/s 40(a)(ia) of the Act is deleted and the AO is directed .....

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to whom the wages have been paid are the employees of the assessee and in support of this claim, Ld. AR further submitted that payment were made to the labourers after depositing the PF and ESI on behalf of all the labourers. He also relied on the order of Ld. CIT(A). 5. We have heard the rival contentions and perused the materials available on record. The issue in the present case is that the AO has treated the payment of wages to the labourers as subject to the provisions of section 194C of t .....

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provisions of section 17(1) of the Act salary includes wages and therefore conceptually there is no difference between salary & wages. Wages are treated just like salary and are taxable on same basis. The employment relationship can be complex, with no quick and easy formulae to use which will provide an instant solution. The general principles of contract law govern the formation of the contract of employment. A contract of employment is a contract by which a person, the employee, undertake .....

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