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TMI Blog2014 (5) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is not liable to deduct TDS u/s. 194C(1) of the Act, invocation of provision of section 40(a)(ia) of the Act is against the provisions of law – the order of the CIT(A) is upheld – Decided against Revenue. - I.T.A No. 1761/Kol/2013 - - - Dated:- 5-5-2014 - Shri Mahavir Singh, JM And Shri Shamim Yahya, AM,JJ. For the Appellant : Shri D. J. Mehta, JCIT, Sr. DR For the Respondent : Shri Somnath Ghosh, Advocate ORDER Per Shri Mahavir Singh, JM : This appeal by revenue is arising out of order of CIT(A)-XXXVI, Kolkata in Appeal No. 758/CIT(A)-XXXVI/Kol/2009-10/Set aside dated 13.02.2013. Assessment was framed by ITO, Ward-1(1), Hooghly u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following facts: The assessee made due compliance to the aforesaid notices from time to time and had submitted the books of accounts, more specifically Cash Book, Party wise ledger and bank book. In course of proceedings the assessee also furnished the details of purchase, statement of labour charges paid (party wise), statement of gross amount (net receipt) from flat owners for my satisfaction. The assessee had also produced various other details which were examined in relation to books of accounts. The AO on perusal of details filed by assessee during the course of assessment proceedings i.e. party wise ledger and party wise labour charges paid noted that the assessee has not deducted TDS on behalf of labour payments under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im during the course of assessment proceedings. Be that as it may, it is observed from the materials adduced on record that the appellant had made payment of less than Rs. 20,000/- at every instance and aggregat ng to less than Rs. 50,000/- to each of these part es throughout the year. It is n this context that the prov s ons of sub-sec. 3(i) to sec. 194C of the I T. Act, 1961 along with the first proviso thereof are reproduced herein below for reference: (3) No deduciion shall be made under sub section (1) or sub-seetion (2) from - (i) the amount of any sum credited or paid or likely to be crediied or paid to the account of, or to, the contractor, if such sum does not exceed twenty thousand rupees: Prov ded that where the aggreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO and have been found to be in order as verified, it is found that not a s ngle payment to the said labourers exceeded the sum of Rs. 20,000/- at one time or Rs. 50,000/- annually. There ore, the appellant was not under any liability in law to deduct any tax under sec. 194C(1) of the Act, as conceived by the AO, from the labour charges ncurred during the assessment year under appeal. In view of such clear exposition in law and on the facts and in the circumstances of the case, it is observed that the AO was wholly in error in not appreciating that the provisions of s. 40(a)(ia) of the Act are not applicable to the facts and circumstances of the instant case as on a conjoint reading of s. 194C(1) along with s. 194C(3) of the Act, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed copy of the accounts of carting paid of Rs.1,09,68,236/- during the year under consideration. On the basis of such document, he had from the outset contended with the Assessing Officer that no individual payment exceeded Rs.20,000/- at a time nor the total to an individual pay exceeded Rs.50,000/- in a year. The Assessing Officer, without discarding such stand of the assessee, proceeded to make disallowance under section 40(a)(ia) of the Act on the premise that tax was not deducted at source. CIT(A) and Tribunal came to the conclusion that such disallowance was made without ascertaining the liability of deducting tax at source. No question of law therefore arises. 7. As the issue is squarely covered in favour of assessee and assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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