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TMI Blog2019 (12) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... ilitators for payments -there is nothing on record to suggest that the payment to labourers were paid to the contractors. On the contrary, assessee has made payment to labourers directly and in support of its claim, Ld. AR of assessee has produced the muster roll. In this regard, Ld. DR failed to bring any defect / information from the muster roll which suggested that the labour charges paid by assessee are subject to TDS. - Decided in favour of assessee. - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER For the Assessee : Shri P.K.Mishra, Advocate For the Revenue : Shri Subhendu Datta, DR ORDER This is an appeal filed by the assessee against the order of CIT(A)-2, Bhubaneswar, dated 01.09.2016 for the assessment year 2010-2011. 2. The sole issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(a)(ia) of the Act is outside the scope and ambit of the such enactment. Accordingly, ld AR submitted that disallowance made u/s.40(a)(ia) of the Act deserves to be deleted. 5. On the other hand, ld. DR(Departmental Representative) relied on the orders of authorities below. 6. On careful consideration of the submissions of both the parties and perusing the material available on the record of the Tribunal as well as the decision relied on by the ld. AR of the assessee, I am of the considered opinion that in the instant case, the controversy is regarding the payments made for disbursement of labour charges to labour sardars. The assessee had specifically stated before the lower authorities that there was no contract between the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, being aggrieved by a portion of the same. It is urged before us that the learned Tribunal ought not to have accepted the judgement and order of the CIT (Appeal) who has quashed the dis allowance of deduction of ₹ 41,33,710/- and on account of tax deduction at source. The learned Tribunal has recorded the fact that the department has not been able to bring any material on record to show that the assessee has made the payment to the transporters in pursuance of contract for carriage of goods of the assessee and the question of deduction at source under section 194C does not and cannot arise. In the absence of evidence of payment made by the assessee to the transporters, the assessee cannot be saddled with the liability of deducting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing summons u/s. 131 of the Act and their statements were duly recorded. The AO failed to bring anything on record that the labour charges were paid in pursuance of contract either in writing or the oral with the labour sardar. The AO has held that the assessee has not complied the provision of Sec. 194C r.w.s. 40(a)(ia) of the Act on the presumption and surmise. There is no evidence that the payments have been made to the contractors. We do not find any merit in the arguments placed by Ld. DR in this connection. The AO has given the clear finding in his order which is as follows : In my opinion, all these labourers who are treated as Labour Sardars are enjoying some privileged position in the eyes of assessee because the assessee colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Sec. 194C of the Act are applicable if the payment has been made to a contractor for the year exceeding ₹ 20,000/-. Similarly the jurisdictional ITAT, Kolkata in the case of Samanwaya Vs. ACIT 34 SOT 332 has held as under : Business expenditure- Dis allowance under s. 40(a)(ia) Need for TDS under s. 194Crelating to payments made for disbursement of labour charges to labour Sardars Assessee had specifically stated before the lower authorities that there is no contract between the assessee and the labour Sardars Revenue authorities could not controvert the submission of the assessee in this respect Even before the Tribunal, the Department could not bring out any evidence by producing cogent material in respect of any co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly we uphold the same. In the circumstances, this issue of Revenue s appeal is dismissed. 7.4. Respectfully following the judicial precedents relied upon herein above, we do not find any reason to interfere with the order of the ld CITA and accordingly dismiss the ground of the revenue. 9. Respectfully following the above, we are of the opinion that the CIT-A was justified in accepting the plea of assessee being the labour sardars are not suppliers of labours and as such he rightly deleted the impugned addition made u/s. 40(a)(ia) of the Act. We uphold the impugned order of the CIT-A. Therefore, the grounds raised by the revenue are liable to be dismissed. 7. In view of the facts and circumstances of the case and respectfully follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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