Case Law Details
Brief of the case
In the case of Pr. CIT Vs. Shri Tulsi Ram Modi, HC of Rajasthan at Jaipur has held that labourer hired by the assessee employed as casual labourers could not be considered to be sub- contractor and therefore provisions of Section 194C and Section 40(a)(ia) of the Act were not applicable. Further, confirm that Section 40(a)(ia) of the Act was applicable to the amount outstanding at the end of the year .
Facts of the case
The respondent assessee is the proprietor of M/s. Riddhi Siddhi Industries & as alleged is engaged in sales of aluminum sections/profiles/profiles, glass sheets, wooden/gypsum boards etc. It has been alleged by the assessee that installation of fitting of such material at customers’ premises is undertaken by employing casual labourers. During the course of proceedings the AO was of the view that the amount paid by the assessee to the casual labourers was liable for TDS u/S 194C(3) & that being so the assessee became contractor & the casual labourers became sub-contractor, as such the assessee ought to have deducted TDS @1% on the payment made to sub-contractor and due to non deduction of TDS, such amount paid by the assessee was disallowed u/S40(a)(ia) of the Act.
Assessee preferred an appeal before CIT(A), CIT(A) looking to the nature of work undertaken by the assessee by employing casual labourers at the business premises of customers deleted the additions by holding as under :-
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The Appeal is filed by the Dept.and not by he assesee,Remarks on Auditors comments are belitiling to say the least.
Sir,
Link provided in the article seems to be irrelevant to said subject.
Kindly verify.
Regards,
J.Janarthanan