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TMI Blog2020 (1) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 180/CTK/2015 - - - Dated:- 22-1-2020 - Chandra Mohan Garg , Member ( J ) For the Appellant : Swati Kejriwal , CA For the Respondents : Subhendu Dutta , DR ORDER Chandra Mohan Garg, Member (J) The assessee has filed this appeal against the order dated 1.12.2014 and of the CIT(A), 1, Bhubaneswar for the assessment years 2005-06. 2. The assessee is aggrieved by the confirmation of addition made under section 40(a)(ia) of the Act of ₹ 7,40,779/- for the assessment year 2005-06. 3. Facts are that the Assessing Officer passed reassessment order u/s. 143(3)/147 of the Act vide dated 6.11.2009, wherein, disallowance of ₹ 7,40,779/- under section 40(a)(ia) of the Act has been made. The payments were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e through the orders of the lower authorities and materials available on the record of the Tribunal. In the instant case, the assessee had paid ₹ 7,40,779/- to two labour sardars without deducting tax at source under section 194C of the Act, therefore, the Assessing Officer has made disallowance of ₹ 7,40,779/- by invoking the provisions of section 40Z(a)(ia) of the Act. The contention of ld. counsel for the assessee is that there was no contract between the labour sardars and the assessee and the payments were made for better administrative convenience and smooth functioning of the factory. I find that similar disallowance was deleted by this Tribunal in the case of Jyoti Prasad Rout (supra), wherein, it was held as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the ld. CITA had deleted the dis allowance on the ground that there is no contract entered into by the assessee and the labour sardars. We find that the impugned issue is covered by the decision of the Honourable Calcutta High Court in the case of CIT Vs Stumm India in ITA No. 127 of 2009 dated 16.8.2010, wherein it was held that:- The court: This appeal is sought to be preferred against the judgement and order of the Ld. Tribunal in relation to the assessment year 2005-06, dated October 24, 2008, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of ₹ 74,33,210/- made by the Assessing Officer by invoking section 40(a)(ia) of the Income Tax Act, 1961 and sustained by the ld. CIT(A) is hereby deleted. This ground of the assessee is allowed. 7.3. We also find that the decision of this tribunal in the case of ACIT vs Supreme Construction in ITA No. 1252/Kol/2013 dated 7.9.2016 had held as under:- 9. We have heard rival contentions of both the parties and perused the materials available on record. At the outset, we find that AO has called the labour contractors by 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 ora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat they are the labour sardars, though they are denying this fact. Whether you admit or not but it can not be denied that these persons enjoy some privileged positions in comparison to other labourers. From the above it is amply clear that the AO himself is not sure and forming the opinion on his own surmise and conjecture. In our considered view the ld. DR has not brought anything contrary to the findings of ld. CIT(A). In this connection we rely on the decision of ACIT Vs. Kalindi Agro Biotech Ltd. (2012) 20 taxmann.com 339 where it was held that the 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 cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee 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. Since no cogent material has been brought on record, in our considered opinion, AO was not justified in invoking the provision of Sec. 194C r.w.s. 40(a)(ia) of the Act. In the background of the above discussions and precedent we do not find any infirmity in the order of Ld. CIT(A) and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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