2015 (10) TMI 2320

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..... specified in the notification. From the bills paid to the SHGs also, it is seen that the payment is made on the basis of number of mandays and wages per day and is not a fixed amount per month. Thus, it is clear that the allotment of work by the assessee to the SHGs is not by way of contract but is engagement of workers for a fixed period. The workers are being paid as per the agreed terms and conditions and the aggregate amount is paid to the group and not to any particular person. Therefore, as rightly held by the CIT (A), there is no contractor contractee relationship but is more in the nature of employee employer relationship as the assessee is also making contributions to the EPF and ESI and as rightly pointed out by the ld CIT (A) .....

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..... per the provisions of section 194C of the I.T. Act, the TDS has to be deducted on the gross amounts paid to the Contractors and not on the profit margin of the contractors. Assessee was therefore, requested to furnish the details of the gross amount paid to the sanitation contractors on which the TDS is not deducted or the TDS is deducted at a lower rate. Accordingly the assessee filed details of the amount on which the TDS is not deducted. After considering the details furnished by the assessee, AO held that the TDS was deductible on such payments and for failure to deduct the TDS, assessee is in assessee in default u/s 201(1) and is also liable to pay interest u/s 201(1A) of the I.T. Act. He accordingly brought the amounts to tax. .....

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..... nsists of proceedings of the assessee alloting the work to various SHGs and the bills for payment of wages to the workers for the months of May, 2009 to demonstrate that the payments were wages only and also the assessee s contribution to EPF and ESI and there was no profit element in any contract. The ld Counsel further submitted that the AO had made a similar disallowance in the case of Municipality at Mahaboobnagar and on further appeal to the CIT (A), the CIT (A) had called for a remand report from the AO who in the remand report accepted that the payments made to the SHGs was not liable to TDS provisions, based on which the CIT (A), had granted relief to the assessee therein. He submitted that the Revenue has not preferred any appeal a .....

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