Once Labour Payments are made, clear-cut Contract exists between the parties

Facts of the Case

The Assessee had paid a sum of Rs.9,22,160/- on account of Sewing and Processing Charges without deducting TDS on the same. The AO invoked the provisions of Section 40(a)(ia) of the Act and disallowed the entire amount paid on account of Sewing and Processing Charges. Aggrieved assesse filed an appeal before the Ld. CIT(A) who deleted the disallowance made by the AO on the ground that the payments were not made under any Agreement of Contract to the Contractors or the Sub-contractors.

Please become a Premium member. If you are already a Premium member, login here to access the full content.