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TMI Blog2012 (9) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... contract works but tax deducted at source was only Rs. 17,360/-. The assessee was asked to furnish the details and in response it was stated that no contract was entered with this person, however, copies of the bills of Shri Abdul Sattar were furnished. According to the Assessing Officer the assessee could not substantiate that the work given to Shri Abdul Sattar was sub-contract, therefore, the assessee should have deducted full tax. The tax deducted was worked out at 50%, therefore, one and half of the total payment of Rs. 15.50 lakhs amounting to Rs. 7.75 lakhs was disallowed. 3. It was further found that a sum of Rs. 8,41,853/- was paid to M/s V.R. Enterprises for carriage of bulk Bitumen to work site, however, TDS of only Rs. 7,473/- was deducted. In response to a query regarding details, it was only stated that the assessee is a contractor for construction of roads and for that purpose Bitumen was required, therefore, carriage by M/s V.R. Enterprises of Bitumen amounted to sub-contract. This statement was not accepted because according to the Assessing Officer M/s V.R. Enterprises was not a sub-contract and accordingly disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n my view, the procurement of labour and work regarding carrying bulk bitumen to work site are the two subcontracts given by the assessee as a consequence of his contracts as a civil contract. 41 Agreeing with the assessee, since the rate of 1% has been correctly applied, I hold that the provisions of section 40(a)(ia) are not applicable. Thus, both the additions of Rs. 7,75,000/- and Rs. 5,08,237/- are deleted allowing the assessee's appeal on these two grounds." 6. Before us, the ld. DR for the revenue submitted that no details were furnished before the Assessing Officer. Moreover it is not clear how Shri Abdul Sattar and M/s V.R. Enterprises have been considered as subcontracts by the CIT(A). 7. On the other hand, the ld. counsel of the assessee pointed out that some labour was taken from Shri Abdul Sattar and some concrete work was also got done through him, therefore, it has to be taken a subcontract. As far as the payment made to M/s V.R. Enterprises is concerned, a sum was paid for carriage of bulk Bitumen from Panipat to hot mix plant at Landran. Therefore, it was also in the nature of subcontract because M/s V.R. Enterprises have play ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt equal to - (i) one per cent in case of advertising, (ii) in any other case two per cent. Of such sum as income-tax on income comprised therein. Provided that no individual or a Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. (2) Any person (being a contractor and not being an individual or a Hindu undivided family) responsible for paying any sum to any resident (hereafter in this section referred to as the sub-contractor) in pursuance of a contract with the sub-contractor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub-contractor or oat the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax on income comprised ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Cross-objections No. 1, 3 & 5 were not pressed. Following two effective cross-objections are as under: "2. That the ld. CIT(A) Chandigarh gravely erred in upholding the addition of Rs. 77,100/- made by the Assessing Officer in respect of the payment of employees share of EPF on the ground that it was paid beyond the specified date as per section 36(1)(va) of the Income-tax Act when the payments were made within the grace period of 5 days. 4. That in the facts and circumstances of the case the Assessing Officer erred in upholding the addition made by the Assessing Officer by invoking the provisions of section 40(a)(ia) of the Income-tax Act in respect of following items: I) Professional payment (para 4.2) Rs. 2,88,320/- ii) Freight payments (Para 5.5) Rs. 6,57,392/- iii) Interest (Para 6.1) Rs. 3,22,776/- iv) Interest payment on car loans Rs. 35,675/- " 12. Cross-objections No. 2 is regarding addition on account of late payment of EPF. 13. During assessment proceedings it was noticed by the Assessing Officer that the payments on account of employees contribution were made late and therefore, same were added to the income of the assessee. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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