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TMI Blog2024 (12) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... and (iv) that the payment should be made for the work done. In a case, when a contract is assigned, generally the clauses are stringent that the contractor is to be responsible for all the acts and defaults committed. In the present case as well, when M/s. Western Oversea Ohio INChad granted sub-contract to assessee then the assessee was to deploy his own resources in terms of manpower. Further the assessee was responsible of any legal or financial liability. Assessee was made solely responsible for the execution of the job. These terms, therefore, suggested that the assessee was wholly and exclusively responsible for the acts as also for the defaults, if committed. The catalogue of criterion must include certain other clauses as well, yet in this case this criterion can be determinative considering the nature of work assigned by the assessee to workers. It is not the case of the A.O. that he happened to be in possession of some material to allege that there existed a specific contract between the assessee and the crew wage workers. Whether the manpower were supplied in pursuance of any sub-contract so as to apply the provisions of section 194C(2)? Nothing has been brought on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by holding that the provisions of section 194C(1)(k) is applicable from 1st June 2007 and thus the assessee is out of the clutches of provisions of section 194C of the Act. Aggrieved by the same, the revenue filed an appeal before the ITAT. The ITAT set-aside the order of the CIT (A) and restored the filed to the AO with a direction to verify the details /explanation filed by the assessee and decide the case de-novo on merits. Thereafter, the order passed by the AO wherein the AO after considering the details filed by the assessee, sustained the addition amounting to Rs 58,76,717/- u/s 40(a)(ia). Aggrieved by the same, the assessee filed an appeal before the first appellate authority, who passed an ex-parte order without providing reasonable opportunity to the assessee was passed. Finally, the appeal has been filed by the assessee before the Tribunal. 5. Before us, from the side of the assessee, ld. Counsel primarily argued that the assessees hire various crew members and depute them with various shipping companies. He makes individual payments to these persons, list of which was duly submitted to the AO. Therefore, the payments are in the nature of wages to employees and not contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding given in the impugned orders and material referred to before us. Before we proceed further, we may like to point out that the provisions of section 194C of the Act had undergone certain vital changes in the recent past. The main purpose of introduction of this section in the Act is to make provisions for deduction of tax at source from payments made to contractors and sub-contractors in certain cases. Income tax is deductible at source from income comprised in payments made by the persons specified in this section. As per the original section 194C(1) any person responsible for paying any sum to any contractor for carrying out any work in pursuance of a contract is required to deduct 2% TDS. However, as per section 194C(2), any person being a contractor responsible for paying any sum to any sub-contractor in pursuance of a contract with the sub-contractor for carrying out any work is required to deduct tax @ 1% at the time of payment. Sub-section (2) has later on made a provision according to which an individual or HUF, whose total sales exceeds the monitory limit prescribes u/s.44AB shall be liable to deduct income tax at the time of payment to a sub-contractor. It is furth ..... 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ANDRA 32600 16.08.05 112924 VIJAYA CHANDRA 24200 16.08.05 112925 MONI MOHAN 32600 16.08.05 112926 BINITA SINGH 35540 16.08.05 112928 MURLI 130000 17.08.05 112929 IMRAN HAQ 46800 17.08.05 112930 MOHHAMD SAFI 15600 20.08.05 112939 AJIT KUMAR 66200 24.08.05 112942 IRIS JOSEPH 16897 24.08.05 112943 PATRICK JOSEPH 16000 24.08.05 112944 IRIS JOSEPH 17000 24.08.05 112945 PATRICK JOSEPH 18000 27.08.05 112947 P.S.SASAM 34000 27.08.05 112948 RAVINDRA VADWA 15000 05.09.05 112950 JOHN A 82246 17.09.0.5 112853 PATRICK JOSEPH 10000 17.09.0.5 112854 PATRICK JOSEPH 10000 17.09.0.5 112855 AMIT MUKHERJEE 15000 17.09.0.5 112856 AMIT MUKHERJEE 10000 19.10.05 112863 BINITA SINGH 19780 29.10.05 112866 JACH ATHAIDE 50000 29.10.05 112868 AUQUHTINE VERGHARE 75000 28.11.05 112877 JOSHEF JADHIDE 100000 29.11.05 112878 DESMONDE 5000 06.12.05 112881 HARISH B.BHATT 10000 12.12.05 112893 HARISH B.BHATT 12000 28.12.05 112895 JOSHEF JADHIDE 25000 29.12.05 112896 JOSHEF JACK ATHAIADE 75000 02.01.06 112899 HARISH B.BHATT 23075 09.01.06 211554 IMRAN 20000 12.01.06 211559 SYED ZAHEER 82200 12.01.06 211560 KAZI SHAMSUDDIN 38000 12.01.06 211561 JOSEPH FRANCES 10300 12.01.06 211562 PRAWEEN K.TYAGI 38000 12.01.06 211563 G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 666 AMBATI ASIF 18550 16.03.06 211668 A.R.SHARMA DD 18550 16.03.06 211669 ANITA HALDER DD 24730 16.03.06 211670 ASIYA ARIF KHOT 19285 16.03.06 211672 KAMALDEEP SINGH 60400 16.03.06 211673 KHOKAN CHANDRA NATH 18600 16.03.06 211674 MURALI D SAHU 15540 16.03.06 211675 SAILESH KUMAR 16755 16.03.06 211676 DATA RAM 24800 16.03.06 211677 A. RAMANA DD 17155 16.03.06 211678 DR.ANDREW GEOGRGE 17340 16.03.06 211679 MANBER SINGH 29740 16.03.06 211680 SANTOSH KUMAR 14240 TOTAL 4900354 DETAILS OF CREW WAGES EXPENSES PAID IN USD DATE Paid thru EEFC A/C IN USD NAME AMOUNT 26.12.05 5830 PERELYGIN VIKTOR 260,391.12 18.01.06 2700 VORONOV IVAN 120,592 80 05.01.06 1540 PERELYGIN VIKTOR 68,782.56 17.02.06 4860 VORONOV IVAN 217,067 04 29.03.06 4000 VORONOV IVAN 178,656.00 29.03.06 2930 VORONOV IVAN 130,865.52 21860 TOTAL 976355.04 IN INDIAN RUPEES 4900354 IN USD [21860 USD ] 976355.04 TOTAL CREW WAGES 5876709.04 ACTUAL AS PER P L 5876717 Difference 7.96 10. The view of the AO was that on payment of crew wages expense , the assessee being a sub-contractor was required to deduct the tax at source as prescribed under sub-section (2) of section 194C of the Act. On the other hand, the assessee s contention is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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