TMI Blog2011 (7) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... is against the order of CIT(A) deleting disallowance made by AO u/s. 40(a)(ia) of the Act for non-deduction of TDS u/s. 194C of the Act. For this, the revenue has raised following three effective grounds of appeal: 1.That, on the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the disallowance made u/s. 40(a)(ia) of the Income-tax Act, 1961. 2.That, on the facts and in the circumstances of the case, Ld. CIT(A) ought to have given recognition to oral contract existing between the assessee and the payees of labour charges so that the payment of labour charges could be held to have attracted TDS provisions u/s. 194C of the Act. 3.That, on the facts and in the circumstances of the case, Ld. CIT(A) ought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is disallowance for this year also. These grounds of appeal are allowed. Aggrieved, now revenue is in appeal before us. 4. At the outset, Ld. Counsel for assessee stated that this issue is squarely covered in favour of assessee and against revenue by Tribunal s decision in assessee s own case in ITA No. 245(Kol) of 2009, Assessment Year 2005-06 dated 9.4.2010, wherein it has been held as under : 5. After hearing the rival submissions and on careful perusal of the material available on record including the ledger copies of the subsequent assessment year ending on 31.03.2006 alongwith ledger copy of 5 Sardars and on careful perusal of the case laws on which the Ld. Authorised Representative of the assessee placing reliance, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or (j) any firm; or (k) any individual or a Hindu undivided family, whose total sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under a Central, State or Provincial Act, any company or any co-operative society for carrying on any work including supply of labour for carrying out any work and a sub-contractor would mean any person who enters into a contract with the contractor for carrying out, or for the supply of labour for carrying out , the whole or the part of the work undertaken by the contractor under a contract with any of the authorities named above of for supply whether wholly or partly and labour which the contractor has undertaken to supply in terms of his contract with any of the aforesaid authorities. We therefore find that s. 40(a)(ia) of the I.T. Act, 1961 cannot be read in isolation or to the exclusion of s. 194C. We find that in this present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere could not be any applicability of section 194C(2) of the I.T. Act, 1961. Therefore the ratio laid down in the aforesaid judgment is squarely applicable to the facts of this case. We further find that the assessee has made payments to individual labours, which is evident from the musterroll enclosed in the paper book page 21. We also find from the muster roll that the person signing as Labour Sardar is also included in the serial of the labours. We find that in this case, admittedly, the Labour Sardars in the present case has no locus standi as Labour Contractor as a Labour Sardar and a Labour Contractor are as different as chalk and cheese. We find that there was no contract between the assessee and the Labour Sardars for supply of labo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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