Case Law Details
The learned counsel for the assessee has raised the same contention as raised before the authorities below that in the absence of any contract entered into between the assessee and the concerned 3 persons, the provision of section 194C was not applicable and there was no question of deduction of tax at source. I am unable to accept this contention of the learned counsel for the assessee. As rightly held by the authorities below, when the amount in question was paid by the assessee to the concerned 3 persons at the fixed rate on monthly basis for the specified services rendered by them, there was bound to be an oral contract on the basis which the services were agreed to be rendered on retainer ship basis. The assessee, therefore, was liable to deduct tax at source in terms of section 194C and having failed to do so, the amount in question was liable to be disallowed under section 40(a)(ia).
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