9911796707
TMI Blog2017 (5) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorized Representative appeared on behalf of assessee and Shri Sallong Yaden, Ld. Departmental Representative represented on behalf of Revenue. 2. The grounds raised by the assessee per its appeal are as under:- "1) That the Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs. 80,19,210 made by the Assessing Officer u/s. 40(a)(ia) of the Income Tax Act, 1961 in respect of wages paid by the Appellant to its workers on the alleged ground that there were shortcomings and defaults in payment of wages or otherwise. 2) That the Ld. Commissioner of Income Tax (Appeals) while confirming the aforesaid disallowance u/s. 40(a)(ia) of the Act erred in not accepting the remand report submitted by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 4. The facts in brief are that assessee in the present case is an individual and engaged in the business of civil construction. The assessee in the year under consideration has claimed labour charges amounting to Rs. 80,19,210/- without deducting the TDS u/s. 194C of the Act. The AO called upon the assessee to explain the reasons for non-deduction of TDS and also directed to furnish the labour register, name and address of the labour, mode of payment, bank statement and details of PF/ESI. However, assessee failed to furnish the same. Therefore, AO disallowed the labour charges for non-deduction of TDS and added to the total income of assessee. 5. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as proof that the assessee had not hired labour under a contract or subcontract. Thus the applicability or non applicability of section 40(a)(ia) of the Act cannot be tested as the payments are in cash. However it is quite possible that all the labour may not have been engaged through a contractor or sub-contractor but the as has not produced any PF/ESI registers and proof of payment of sums under the EPF & MP Act or the ESI Act to substantiate that all the labour were his own. The assessee has also not complied with the State Government's Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and has not adduced evidence that he has got his business and his labour registered under the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual labourers and not to the labour contractor. Therefore the individual labourers can be treated as employee of the assessee. The employer is a person who controls and directs a servant or worker under an express or implied contract of employment. The employer accordingly is under obligation to pay him the salary or wages in compensation. Accordingly, an individual who works part-time or full-time under a contract of employment whether oral or written expressed or implied and he is liable to perform the duties as assigned. That person is called as employee. In the instant case we find that the labourers are working under the direct supervision of the assessee. They have no other separate business organization. They are representing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doctors were employees of the assessee, and that even if there was a distinction between the terms of employment of the permanent employees and those of consultant doctors, the fact was that they were the employees of the assessee falling in the category of fixed period/contract employee and/or part-time employee. It, therefore, followed that the relationship between the assessee and the consultant doctors was purely that of employer and employee and remuneration paid to them in terms of the said relationship was salary which attracted the provisions of section 192. [Para 14] The treatment given by the assessee as well as the consultant doctors to the remuneration paid in their respective books of account was not conclusive to decide the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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