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TMI Blog2024 (12) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... has found that the assessee has claimed "crew wages expenses" of Rs. 58,76,717/-. It was also noted by the AO that, on that payment no tax was deducted at source. As per AO, the assessee was required to deduct the TDS as applicable u/s. 194C of the IT Act. According to AO, the assessee himself being a contractor, therefore, got the work done by those parties under an implied contract. Held, the payment was made in contravention of section 194C hence invoked provisions of section 40(a)(ia) of the Act, therefore, the amount claimed was disallowed by the AO. The matter was carried before the first appellate authority. 4. Before the first round of appellate proceedings, the CIT (A) deleted the addition made by the AO by holding that the provisions of section 194C(1)(k) is applicable from 1st June 2007 and thus the assessee is out of the clutches of provisions of section 194C of the Act. Aggrieved by the same, the revenue filed an appeal before the ITAT. The ITAT set-aside the order of the CIT (A) and restored the filed to the AO with a direction to verify the details /explanation filed by the assessee and decide the case de-novo on merits. Thereafter, the order passed by the AO wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2009] 126 TTJ 240 (Ctk). 6. From the side of the Revenue, Ld DR placed reliance on the orders of the authorities below. He has argued that as per the provisions of section 194C(2) any person being a contractor responsible for paying any sum to a sub-contractor in pursuance of a contract with the sub-contractor for carrying out any part of the work undertaking by the contractor is required to deduct an amount equal to 1% as TDS. The assessee has not deducted the tax, therefore, the AO has rightly disallowed the claim. Due to this reason, the question of non-deduction of tax, therefore, fall within the ambits of section 194C(2) of the IT Act, ld. DR has pleaded. 7. We have heard both the parties and perused the relevant finding given in the impugned orders and material referred to before us. Before we proceed further, we may like to point out that the provisions of section 194C of the Act had undergone certain vital changes in the recent past. The main purpose of introduction of this section in the Act is to make provisions for deduction of tax at source from payments made to contractors and sub-contractors in certain cases. Income tax is deductible at source from income comprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: DETAILS OF CHEQUE ISSUED FOR CREW WAGES FOR THE F.Y. YEAR 2005-06 DATE CHEQUE NAME AMOUNT 16.08.05 112904 S.MOHHMAD 105800 16.08.05 112905 AJAY K.DUTTA 76800 16.08.05 112906 SUSHANT K.SHAU 57500 16.08.05 112907 J.M.DAS 13800 16.08.05 112908 ALI SHAIKH 13800 16.08.05 112909 RAKESH RANJAN 13800 16.08.05 112910 DEEVAKAR RAY 9450 16.08.05 112911 SINDU MAJHEE 16100 16.08.05 112912 SATYADEV 18400 16.08.05 112913 AMIN ISLAM 13800 16.08.05 112914 KAJAL KANTI 18400 16.08.05 112915 SANJAY BHOWMIK 85000 16.08.05 112916 SANJAY BHOWMIK 18800 16.08.05 112918 DESNIBD SEQYEBA 154000 16.08.05 112919 SONIA MITRA 25200 16.08.05 112920 ABDUL 24200 16.08.05 112921 GAUAM 24200 16.08.05 112922 LOKINDER SINGH 11000 16.08.05 112923 NARAYAN CHANDRA 32600 16.08.05 112924 VIJAYA CHANDRA 24200 16.08.05 112925 MONI MOHAN 32600 16.08.05 112926 BINITA SINGH 35540 16.08.05 112928 MURLI 130000 17.08.05 112929 IMRAN HAQ 46800 17.08.05 112930 MOHHAMD SAFI 15600 20.08.05 112939 AJIT KUMAR 66200 24.08.05 112942 IRIS JOSEPH 16897 24.08.05 112943 PATRICK JOSEPH 16000 24.08.05 112944 IRIS JOSEPH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D 25935 17.02.06 211624 UMA SHAVKAR SINGH 45600 17.02.06 211626 HUSSIAN B ABBAI 105000 17.02.06 211627 A.R.SHARMA DD 12550 17.02.06 211625 ANITA HALDER DD 35110 17.02.06 211628 TEJENDRA WALIA 147545 17.02.06 211629 AMBATI ASIF 19750 17.02.06 211630 KAMAL DEEP SINGH 55860 17.02.06 211631 DATA RAM 24400 17.02.06 211632 L.A.RAMANA DD 13750 17.02.06 211634 MANBAR SINGH 23000 17.02.06 211635 SANTOSH KUMAR 14500 17.02.06 211636 ARIYA ARIF KHOTE 47675 17.02.06 211637 MOHINDER N WADHWA 14000 17.02.06 211638 M.D.SHAU 13800 28.02.06 211646 JOSEPH J ATHAIDE 175000 06.03.06 211647 ARIYA ARIF KHOTE 52325 06.03.06 211648 K.C.NATH 13800 06.03.06 211649 SHAILESH KUMAR 13800 06.03.06 211650 Dr.ANDREW GEOGRGE 13800 14.03.06 211654 IRIS JOSEPH 7500 14.03.06 211655 PATRICK JOSEPH 7500 14.03.06 211657 MOHINDER N WADHWA 261233 14.03.06 211659 JOSEPH J ATHAIDE 127637 14.03.06 211660 MOHINDER N WADHWA 5000 16.03.06 211661 LAXMI CHANDRA 18600 16.03.06 211662 PUSPA RANI DD 18550 16.03.06 211663 RESHMA S KHALPE DD 18550 16.03.06 211664 TEJENDRA WALIA 124000 16.03.06 211665 UMA SHANKAR SINGH 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be made for the work done. In a case, when a "contract" is assigned, generally the clauses are stringent that the contractor is to be responsible for all the acts and defaults committed. 12. In the present case as well, when M/s. Western Oversea Ohio INChad granted sub-contract to assessee then the assessee was to deploy his own resources in terms of manpower. Further the assessee was responsible of any legal or financial liability. Assessee was made solely responsible for the execution of the job. These terms, therefore, suggested that the assessee was wholly and exclusively responsible for the acts as also for the defaults, if committed. 13. In other words, peculiarity of this case is that the contract which was assigned to this assessee was not further sub-contracted to any third party. In a sub-contract, a prudent contractor generally includes the clauses of liability which were undertaken by him while accepting the execution of the work from the main contractor. We may like to clarify that a condition of passing of the liability cannot exhaustive and cannot be said to be the only criteria to decide whether there was an existence of contract or sub-contract. The cata ..... X X X X Extracts X X X X X X X X Extracts X X X X
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