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TMI Blog2016 (11) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... AND SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER For The Assessee : Shri. G. Bhaskar, Advocate For The Revenue : Smt. Swapna Das, JCIT ORDER PER VIJAY PAL RAO, JUDICIAL MEMBER: This appeal by the assessee is directed against the order dt.18.03.2013 of CIT (A)-III, Bengaluru, for the assessment year 2008-09. 02. There is a delay of 33 days in filing the appeal. The assessee has filed a petition for condonation of delay. An affidavit of the CA of the assessee is also filed explaining the cause of delay as it has escaped his attention due to heavy pressure of outstanding audits of cooperative banks. Subsequently he realised the receipt of the impugned order and then took the steps to prepare the appeals and filed the same without further delay. 03. Ld. AR of the assessee has submitted that the delay in filing the appeal was due to an inadvertent and bonafide mistake on the part of the CA because of his business and heavy pressure of work of outstanding audits of banks. Thus the Ld. AR has submitted that the delay of 33 days is neither intentional nor deliberate but due to unavoidable reasons which were beyond the control of the assessee. Accordingly the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and style of Star Builders . For construction of apartment of twelve units in a joint venture with one Mr. Armugam, a labour contract was entered into for supply of labourers by one Shri. Venkatesh. During the construction of the said apartment, the materials were also procured through the labour contractor Shri. Venkaresh. The details of the amounts paid during the year to the labour contractor are reproduced by the AO at page 6, as under : Sl No. Nature of Expenses Amount TDS 1. Labour charges 34,40,000.00 77,950.00 2. Supply of Materials 63,23,430/- N.A Total 97,63,430.00 09. AO noted that the assessee has deducted TDS in respect of labour charges. However, the assessee has not deducted tax at source on the amount of ₹ 63,23,430/- paid / payable to Shri. Venkatesh. The assessee explained before the AO that the said payment was made for supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be invoked in the case of short-deduction of tax at source. The Tribunal has decided this issue by holding that Section 40(a)(ia) cannot be applied only for the reason that there was a short-deduction of tax. He has then referred to the decision of Hon ble jurisdictional High Court in the case of CIT v. HP (India) Sales P. Ltd [382 ITR 496] and submitted that the similar view taken by the Tribunal has been upheld by the Hon ble jurisdictional High Court. 12. On the other hand the Ld. DR has relied upon the orders of the authorities below and submitted that there is a concurrent finding by the AO as well as the CIT (A) that the payment in question was made as a composite payment under the work contract and therefore the provisions of Section 194C of the Act are attracted on this payment. Since the assessee has failed to deduct the tax at source the provisions of Section 40(a)(ia) are attracted. 13. We have considered the rival submissions and considered the relevant material on record. As it is clear from the details of the payments that assessee made the payments under two heads, one for labour charges and another for the supply of material. The AO held that payment was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the genuineness or otherwise of the expenditure, but rather whether tax was to be deducted on the same. It is clear from the ledger account of Sri Venkatesh as well as the written submission of the appellant that the payment was not made directly to the vendor of the construction materials, but was rather made to Sri Venkatesh by credit to his ledger account. I am of the view that the services rendered by Sri Venkatesh with respect to the procurement of materials, in the context of the 'ease of operations' referred to by the appellant, actually represent a contract with the payments towards the same being exigible to tax deduction at source, By simply insisting that the purchases were made in the name of the appellant, It does not change the character of the relationship with Sri .Venkatesh, which is of a regular supply contract for materials. I also have to note in passing here that in his written submission itself, the appellant refers to Sri Venkatesh. as a contractor . The appellant has relied on two case laws of the ITAT Jaipur and Hyderabad Benches, which are however found to be based on a separate set of facts and premises. Hence, the same are clearly disti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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