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TMI Blog2014 (7) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 2008-09. Since factual background and the issues involved in both these appeals are common, they are being disposed of with this common order for the sake of convenience. 2. Facts of the case in brief, common for both the years, are that the assessee is engaged in the business of execution of civil contract works. A survey operation under S.133A of the Income Tax Act,1961 was conducted on 24.3.2008 in the business premises of M/s. Sri Avanthika Contractors, which is a proprietary concern of Shri K. Narendra Reddy. Following the survey, summons under S.131 and letters were issued to the assessee calling for the books of account and other relevant details relating to TDS for the financial years 2006-07 and 2007-08. On examining the inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructions Limited and Airport Authority of India, which are Government Organisations, and consequently partly allowed the appeal of the assessee for that year. 4. Aggrieved, assessee preferred these appeals before us for the assessment years 2007-08 as well as 2008-09 5. Grounds of appeal raised by the assessee in ITA No.1805/Hyd/2013 for assessment year 2007-08 read as follows- "1. The order of the A.O. is contrary to law, facts and circumstances of the case. 2. The A.O. ought not to have determined the short deduction with respect to earth work/labour charges when there was no short deduction. 3. The Appellate Commissioner ought not to have confirmed the above action of the A.O. determining that there was short deduction of TDS wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supervisors. Books were maintained to monitor the man hours put in by the labour, which form the basis for wages to be paid. He further submitted that there are no sub-contractors for the labour and all the labour were directly employed by the assessee and the payments were made directly by the assessee to the labour, either daily or weekly or fortnightly at various sites depending on the nature of work. Placing reliance on the decision of the Delhi Bench of the Tribunal in the case of ACIT V/s. Kalindi Agro Biotech Ltd. (2012) 20 taxmann.com.339(Delhi), duly furnishing a copy thereof before us, he submitted that where assessee made direct payments to the labour, the provisions of S.194C are not applicable. He pointed out that there was sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erifiable expenditure claimed in the Profit & Loss Account. The relevant assessment orders placed on record in the impugned years do indicate that Assessing Officer examined the payments in detail and accepted the additional income offered on these payments. Had the payments been made to sub-contractors as alleged, the Assessing Officer certainly would have invoked provisions of S.40a(ia) and not S.37(1) in the scrutiny proceedings. Having accepted the offer made by the assessee, based on the reason that the payments to labour for earth work were directly made by the assessee and there are no sub-contractors for the labour, and books are maintained to monitor the man hours put in by the labour, it is neither fair nor proper for the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of S.201(1) and 201(1A) in relation to these payments made by the assessee towards finance charges, the CIT(A) by the impugned order after elaborate discussion of the various instructions and circulars of the CBDT on the issue, ultimately upheld the action of the Assessing Officer. Aggrieved, assessee is in appeal on this aspect. 12. We have considered the rival submissions and perused the orders of the Revenue authorities and other material available on record. The parties to whom finance charges in question have been paid are finance companies, and the contention of the assessee is that the said charges have been incurred on account of equipment taken on hire purchase from those parties, and the payments made to those parties are not i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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