ITO 21 (1) (5), MUMBAI V. JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT, MUMBAI

ITA 5881/MUM/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9505 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS SAMATHA MULLAMUDI
• Keywords: Revised return; TDS
• Section: 143(3); 40(a)(ia); 194C; 80P; 113; 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI PAWAN SINGH (JM) & SHRI S RIFAUR RAHMAN (AM) ITA NO. 5881/MUM/2016(A.Y.: 2009-10) ITO 21(1)(5), ROOM NO. 120, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400016 VS M/S JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT, 1, DEV DARSHAN, GROUND FLOOR, IN FRONT OF WAKADE HOUSE T.H. KATARIA MARG, MAHIM, MUMBAI-400 016 PAN : AADFJ0626J APPELLANT RESPONDEDNT ITA NO. 6135/MUM/2016(ASSESSMENT YEAR : 2009-10) M/S JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT, 1, DEV DARSHAN, GROUND FLOOR, IN FRONT OF WAKADE HOUSE T.H. KATARIA MARG, MAHIM, MUMBAI-400 016 PAN : AADFJ0626J VS ITO 21(1)(5), ROOM NO. 120, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400016 APPELLANT RESPONDEDNT ASSESSEE BY SHRI PIYUSH CHHAJED AR RESPONDENT BY MRS. SAMATHA MULLAMUDI SR DR DATE OF HEARING 19-02-2020 DATE OF PRONOUNCEMENT 18-03-2020 O R D E R PER PAWAN SINGH, JM : 1. THESE CROSS APPEALS FILED BY THE REVENUE AND THE AS SESSEE ARE DIRECTED AGAINST THE LEARNED COMMISSIONER OF INCOME-TAX-33[C IIT(A)], MUMBAI DATED 05-07-2016 FOR ASSESSMENT YEAR 2009-10. 2. FACTS AS TAKEN FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE, A REGISTERED CO-OPERATIVE SOCIETY CONSISTING OF IND IVIDUAL LABOURERS, 2 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT FILED ITS RETURN OF INCOME ON 14-02-2011 DECLARING TOTAL INCOME AT RS.1,02,277/- FOR ASSESSMENT YEAR 2009-10. THE ASS ESSMENT WAS COMPLETED ON 30-12-2011 DETERMINING TOTAL INCOME AT RS.10,61,69,963/-. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER BESIDES THE OTHER ADDITIONS, MADE ADDITION UNDER SECTION 40(A)( IA) OF RS. 10,51,52,466/-, FOR THE WANT OF DEDUCTION OF TDS ON LABOUR CHARGES. ON APPEAL, THE LD. CIT(A) PARTLY RESTRICTED THE DISALL OWANCE U/S 40(A)(IA) FOR NON DEDUCTION OF TDS ON LABOUR. THE ADDITIONAL GRO UND RAISED BY ASSESSEE REGARDING CLAIM FOR DEDUCTION U/S 80P WAS NOT ADMITTED ON THE GROUND THAT NO DEDUCTION U/S 80P WAS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME AND NO NEW CLAIM CAN BE MADE BY TH E ASSESSEE WITHOUT FILING REVISED RETURN OF INCOME AS HELD BY THE HON BLE SUPREME COURT IN THE CASE OF GOETZE LTD 284 ITR 323 (SC). ON FUR THER APPEAL TRIBUNAL THE CASE WAS RESTORED BACK TO THE FILE OF THE ASSES SING OFFICER TO DECIDE AFRESH, VIDE ORDER DATED 23-07-2014 IN ITA NO.2300/ MUM/2013, BY HOLDING AS UNDER:- ' THE A.O. HAS DISALLOWED LABOUR CHARGES OF WHICH NO TAX WAS DEDUCTED AT SOURCE IN SUMMARY MANNER WITHOUT GIVING ANY SPECIFI C FINDING OR POINTING OUT HOW THE PROVISIONS OF SECTION 194C APPLY ON THI S PAYMENT WHICH ALSO INCLUDE PURCHASE OF MATERIAL. IN OUR CONSIDERED VIE W, THIS ISSUE NEEDS RE- VERIFICATION. WE THEREFORE RESTORE THIS ISSUE TO TH E FILE OF A.O. THE A.O. IS DIRECTED TO DECIDE THIS ISSUE AFRESH IN LIGHT OF PR OVISION OF SECTION 194C OF THE ACT CONSIDERING 'HE DETAILS FURNISHED BY THE AS SESSEE AFTER GIVING 3 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEAR D. THE ASSESSEE IS DIRECTED TO PROVIDE ALL THE NECESSARY DETAILS TO TH E A.O. ' 3. ACCORDINGLY, IN VIEW OF THE ORDER OF TRIBUNAL THE ASSESSING OFFICER PASSED FRESH ASSESSMENT ORDER U/S 143(3) R.W.S. 254 ON 30-03-2015 DETERMINING TOTAL INCOME AT RS.10,61,69,963/- WHERE IN HE REPEATED THE ADDITION ON ACCOUNT OF NON DEDUCTION OF TDS ON LABO UR CHARGES; AND DENIED THE CLAIM U/S 80P(2)(VI). AGGRIEVED, ASSESS EE CARRIED THE MATTER BEFORE CIT(A). THE LD.CIT(A) PARTIALLY ALLOWED THE GROUND OF APPEAL PERTAINING TO DEDUCTION U/S 194C, AS HAS BEEN DONE IN HIS ORIGINAL ORDER THEREBY GRANTED RELIEF OF RS.4,81,59,057/-. HOWEVE R, WITH REGARD TO DEDUCTION U/S 80P(2)(VI), THE LD.CIT(A) DISMISSED T HE GROUND. ACCORDING TO THE LD.CIT(A), DEDUCTION U/S 80P(2)(VI ) IS AVAILABLE TO AN ASSESSEE, ONLY IF THE CO-OPERATIVE SOCIETY IS ENGAG ED IN THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS MEMBERS AND THAT IN T HE INSTANT CASE, THE ASSESSEE HAS EXTENSIVELY OUTSOURCED ITS CONTRACT WO RK TO OUTSIDE PARTIES. THE LD. CIT (A) HELD THAT THERE WAS NO COLLECTIVE D ISPOSAL OF THE LABOUR OF ITS MEMBERS OF THE SOCIETY; HENCE, THE CLAIM WAS DENIED. AGGRIEVED, BOTH, THE REVENUE AND THE ASSESSEE HAVE FILED THEIR RESPECTIVE APPEAL. THE REVENUE IN ITS APPEAL IN ITA NO. 5881/MUM/2016 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 4 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT 1. 'ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,81,59,0 57/- MADE ON ACCOUNT OF DISALLOWANCES U/S 40(A) (IA) OF THE INCOME TAX ACT, 1961.' 2. 'ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED TO APPRECIATE THE FACT THAT THE LABOUR CH ARGES PAID TO ALL THE PARTIES EXCEEDS THE THRESHOLD LIMIT OF RS. 20,000/- AND WHE N THE ASSESSEE HAS SEPARATELY DEBITED THE PURCHASES OF RS. 3,23,16,515 /- IN THE PROFIT AND LOSS ACCOUNT, THE QUESTION OF REDUCING THE COST OF MATER IAL FROM THE LABOUR CHARGES DOES NOT ARISE.' 3. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING THE ISSUE WHETHER THE AMO UNT ON WHICH THE RELIEF WAS ALLOWED CONSISTED OF ANY MATERIAL COST OR WAS BELOW THE THRESHOLD LIMIT OF RS. 20,000/-' 4. THE ASSESSEE IN ITS APPEAL IN ITA NO.6135/MUM/2016 HAS RAISED FOLLOWING GROUNDS OF APPEAL :- THE GROUNDS MENTIONED HEREUNDER ARE WITHOUT PREJUDI CE TO ONE ANOTHER. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN TREATING CHARGES PAID FOR CARRYING OUT THE WORK COVERED U/S. 194C, SPECIFICALLY WHEN THERE WAS NO CONTRACT FOR SUB- CONTRACT BETWEEN APPELLANT AND THE PAYEES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DISALLOWING THE TOTAL AMOUNT ON WHICH NO TDS WAS DEDUCTED INSTEAD OF AMOUNTS PAYABLE AS AT 3 1-3-2009 AMOUNTING TO RS.2,13,28,310/- AS REQUIRED BY SECTION 40A(IA). 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DISALLOWING THE CLAIM OF APPELLANT U/S. 80P(2)(VI) OF THE INCOME TAX ACT. 5. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED REPRES ENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE LOW ER AUTHORITIES. THE LD. AUTHORISED REPRESENTATIVE (LD AR) OF THE ASSESS EE SUBMITS THAT 5 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT ASSESSEE IS A REGISTERED CO-OPERATIVE SOCIETY REGIS TERED UNDER THE PROVISIONS OF MAHARASHTRA CO-OPERATIVE SOCIETIES AC T. THE ASSESSEE WAS FORMED WITH THE OBJECT OF SERVING ITS MEMBERS, WHO ARE BASICALLY LABOURER COMMUNITY AND ENGAGED IN LABOUR WORK SUCH AS MASON, HELPER, PAINTER, ETC. THE BASIC OBJECT OF ASSESSEE IS TO U NITE INDIVIDUAL LABOURERS AT ONE PLACE SO THAT THE BIDDING FOR THE CONSTRUCTI ON CONTRACT WOULD BE DONE AND OBTAINED CONTRACT FROM MUNICIPAL CORPORATI ON, AND OTHER GOVERNMENTAL AGENCIES. DURING THE IMPUGNED ASSESSM ENT YEAR, THE ASSESSEE WAS AWARDED VARIOUS CONTRACTS FOR CONSTRUC TION OF PUBLIC TOILET, PUBLIC BATHROOM FROM MUNICIPAL CORPORATION. THE AS SESSEE RECEIVED RS.28.25 CRORES FOR EXECUTION OF AWARDED CONTRACT. FOR EXECUTION OF WORK CONTRACT AWARDED TO THE ASSESSEE, THE ASSESSEE PROCURED VARIOUS MATERIALS FROM THE MARKET AND UTILISED SERVICES OF INDIVIDUAL LABOURERS, WHEREVER REQUIRED. AS PER THE CONTRACT AWARDED BY VARIOUS MUNICIPAL CORPORATIONS TO ASSESSEE, THE ASSESSEE WAS RESPONSI BLE FOR PROPER EXECUTION AND TO HANDOVER THE COMPLETED WORK TO THE CONCERNED AGENCY. THE RISK AND RESPONSIBILITY FOR EXECUTION OF CONTRA CT REMAINED WITH THE ASSESSEE. GENERALLY, AS PER THE TERMS OF CONTRACT, THE CONTRACTOR / ASSESSEE CANNOT SUB-CONTRACT OR SUBLET THE EXECUTIO N OF CONTRACT TO SUB- CONTRACTORS. THE RISK AND THE RESPONSIBILITY ARE A LWAYS ON THE ASSESSEE. FOR SMOOTH EXECUTION OF CONTRACT, THE ASSESSEE PROC URED MATERIAL FROM 6 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT VARIOUS SOURCES AND UTILISED SERVICE OF INDIVIDUAL LABOURERS AS AND WHEN REQUIRED. AT NO POINT OF TIME, ANY PORTION OF CONT RACT WAS SUB- CONTRACTED. THUS, THE COMPLETE RISK AND RESPONSIBI LITY REMAINS WITH THE ASSESSEE. DURING THE COURSE OF ASSESSMENT, THE DET AILS OF EXPENSES INCURRED AND DEBITED TO LABOUR CHARGES PAID IN THE P&L ACCOUNT WERE FURNISHED. THE ASSESSEE FURNISHED THE NAME OF PART IES, TOTAL AMOUNT PAID TO THESE PARTIES. IN CASE THE AMOUNT PAID TO THE I NDIVIDUALS ARE LESS THAN RS.20,000/-, THE LIST OF THOSE PERSONS WERE GIVEN I N SEPARATE COLUMN. BREAK UP OF TOTAL PAYMENT OF MATERIAL AND LABOUR WA S ALSO PROVIDED. THE TOTAL PAYMENT MADE ON WHICH TDS WAS MADE AND DE POSITED BEFORE DUE DATE OF FILING RETURN. THE TOTAL AMOUNT PAID O N WHICH TDS HAS BEEN DEDUCTED BUT NOT DEPOSITED BEFORE DUE DATE OF FILIN G OF RETURN AND OUTSTANDING AMOUNT PAYABLE TO THE PARTIES AS ON 31- 03-2009. OUT OF THE TOTAL EXPENSES DEBITED BY THE ASSESSEE OF RS.24.36 CRORES, THE TDS HAS BEEN DEDUCTED ON THE AGGREGATE AMOUNT OF RS.17.88 C RORES U/S 194C OF RS.20,27,583/-. THE AO IN ORIGINAL ASSESSMENT ORDE R AS WELL AS IN RESTORATION PROCEEDINGS DISALLOWED RS.10.51 CRORES U/S 40(A)(IA) FOR NON DEDUCTION OF TDS U/S 194C. DESPITE THE DIRECTION O F TRIBUNAL, THE AO MADE DISALLOWANCE ON ESTIMATED BASIS WITHOUT APPLIC ATION OF MIND AND LEGAL POSITION. THE AO DID NOT CONSIDER THE CORRE CT FIGURE OF TDS DEPOSIT AND DISALLOWED THE BALANCE FIGURE WITHOUT A PPRECIATING THE 7 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT DETAILS FURNISHED. THE AO FAILED TO APPRECIATE THA T SECTION 194C DOES NOT APPLY TO THE PAYMENTS INCURRED BY ASSESSEE ON I TS OWN ACCOUNT. AS THERE WAS NO CONTRACT EITHER ORAL OR WRITTEN BETWEE N THE ASSESSEE AND ANY OF THE PARTIES. THE EXPENSES HAVE BEEN INCURRED BY ASSESSEE ON ITS OWN ACCOUNT AND NOT INCURRED TOWARDS SUB CONTRACTING PA RTIES. THEREFORE, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE. THE LD.AR FOR THE ASSESSEE SUBMITS THAT CAREFUL PERUSAL OF SECTION 19 4C MAKES IT CLEAR THAT IT APPLIES TO ANY PAYMENT MADE TO A CONTRACTOR FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BETWEEN THE DIRECTOR AND THE SPECIFIED PERSONS. THE CONTRACT ALSO INCLUDE, SUB CONTRACT. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO REMOTELY SUGGEST THAT THERE WAS ANY KIND OF ORAL OR WRITTEN CONTRACT OR SUB-CONTRACT WI TH THE OUTSIDE PARTIES. 6. IN SUPPORT OF HIS SUBMISSION, THE LD.AR OF THE ASSE SSEE HAS RELIED UPON THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN SWAS TIK CONSTRUCTION (2018) 91 TAXMANN.COM10(GUJARAT); VISHNUDUTT SHARMA (2013) 33 TAXMANN.COM 284 (GUJARAT HIGH COURT); AND PRASHANT H SHAH (2013) 29 TAXMANN.COM 296 (GUJARAT HIGH COURT) AND DECISION O F TRIBUNAL IN DATTA DIGAMBER SAHAKARI KAMGAR SANSTHA LTD (2002) 8 3 ITD 148 (ITAT PUNE BENCH). 7. IN THE ALTERNATIVE AND WITHOUT PREJUDICE SUBMISSION , THE LD.AR SUBMITS THAT THE AO DISALLOWED RS.10.51 CRORES U/S 40(A)(IA ) ON ACCOUNT OF NON 8 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT DEDUCTION OF TDS U/S 194C. THE PERUSAL OF STATEMEN T PROVIDED BY ASSESSEE SHOWS MAXIMUM DISALLOWANCE OF RS.3.52 CROR ES ON ACCOUNT OF LABOUR OPERATION ON WHICH NO TDS HAS BEEN DEDUCTED, PRESUMING THAT SECTION 194C IS APPLICABLE. FURTHER DISALLOWANCE O F RS.1.42 CRORES ON WHICH TDS OF RS.1.61 LAKHS WAS DEDUCTED, BUT NOT DE POSITED BEFORE DUE DATE OF FILING OF RETURN COULD BE DISALLOWED U/S 40 (A)(IA) PRESUMING SECTION 194 IS APPLICABLE AND RS.74.50 LAKHS ON WHI CH TDS WAS PAID BUT PAID AFTER DUE DATE OF FILING RETURN. THUS, T HE TOTAL AMOUNTS OF RS.5.69 CRORES FOR LABOUR CHARGES ON WHICH TDS HAS NOT BEEN DEDUCTED / DEDUCTED BUT PAID BEFORE DUE DATE. IT WAS FURTHER SUBMITTED THAT THE AMOUNT WHICH COULD BE DISALLOWED ONLY TO THE EXTENT THE AMOUNT NOT PAID ON 31-03-2009 TO THE PARTIES FROM WHICH TDS HA S TO BE DEDUCTED IS ONLY RS.2.13 CRORES. 8. THE LD.AR FINALLY SUBMITS THAT HIS PRIMARY AND BAS IC SUBMISSION IS THAT PROVISIONS OF SECTION 194C IS NOT APPLICABLE ON THE ASSESSEE AND THERE CANNOT BE ANY DISALLOWANCE AND HE HAD ARGUED IN WIT HOUT PREJUDICE AND IN ALTERNATIVE SUBMISSION THAT MAXIMUM DISALLOWANCE CAN BE TO THE EXTENT ON OUTSTANDING LABOUR PAYMENT ON WHICH NO TD S HAS BEEN DEDUCTED WHICH IS ONLY RS.2.13 CRORES. IN SUPPORT OF HIS SECOND ALTERNATIVE AND WITHOUT PREJUDICE SUBMISSION, THE L D.AR RELIED UPON THE 9 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT DECISION OF ALLAHABAD HIGH COURT IN VECTOR SHIPPING SERVICES PVT LTD 38 TAXMAN.COM 77 (ALL). 9. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESE NTATIVE (LD. DR) IN THE APPEAL OF REVENUE SUPPORTED THE ORDER OF AO. ON THE GROUND OF APPEAL IN ASSESSEES APPEAL THE LD. DR SUPPORTED TH E ORDER OF LD. CIT(A). THE LD. DR FURTHER RELIED UPON THE DECISIO N OF PALAM GAS SERVICES V/S CIT [2017] 81 TAXMAN.COM 43 (SC). THE LD. DR FURTHER SUBMITS THAT SECTION 40(A)(IA) NOT ONLY COVERS CASE S WHERE AMOUNT IS YET TO BE PAID BUT ALSO THOSE CASES WHERE AMOUNT HAS AC TUALLY BEEN PAID. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH TH E PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. GROU NDS 1 OF APPEAL OF ASSESSEE AND GROUND NO.1 IN REVENUES APPEAL ARE TAK EN TOGETHER FOR ADJUDICATION. THE AO IN ORIGINAL ASSESSMENT AS WEL L AS IN RESTORATION PROCEEDINGS HAD MADE DISALLOWANCE OF RS.10.51 CRORE S FOR NON ADJUDICATION OF TDS ON LABOUR CHARGES. THE AO MADE DISALLOWANCE BY TAKING VIEW THAT NATURE OF WORK ASSIGNED TO THE PAR TIES, WHO HAS CONSTRUCTED THE PUBLIC TOILET AND THE NATURE OF WOR K IS SQUARELY A SUB- CONTRACTUAL AND IS COVERED BY SECTION 194C. BEFORE THE LD. CIT(A), THE ASSESSEE FURNISHED DETAILED SUBMISSION EXPLAINING T HE FACT THAT THERE WAS NO ASSIGNMENT OF WORK TO THE LABOURERS, RISK AND RE WARD WAS ALWAYS WITH THE ASSESSEE. THE ASSESSEE ALSO PROVIDED THE NAME OF PARTIES, AMOUNT 10 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT PAID DURING THE RELEVANT PERIOD, AMOUNT ON WHICH TD S WAS MADE AND DEPOSITED BEFORE DUE DATE OF FILING RETURN OF INCOM E, THE AMOUNT PAID TO INDIVIDUALS LESS THAN RS.20,000 IN A SEPARATE COLUM N AND THE AMOUNT OUTSTANDING PAYABLE ON THE LAST DAY OF FINANCIAL YE AR. THE DETAILED SUBMISSION OF THE ASSESSEE IS RECORDED BY THE LD. C IT(A) AT PARA 14 OF THE IMPUGNED ORDER. THE LD. CIT(A) ALSO REPEATED T HE SAME ADDITION AS AFFIRMED IN FIRST ROUND OF APPEAL. THE LD. CIT(A), WHILE AFFIRMING THE EARLIER ORDER OF HIS PREDECESSOR HELD THAT PLAIN RE ADING OF THE PROVISIONS (SECTION 194C), IT CAN BE SEEN THAT ANY AMOUNT PAID FOR SUPPLYING LABOUR FOR CARRYING OUT ANY WORK IS COVERED. THE ASSESSEE HAS PAID TO DIFFERENT PARTIES FOR SUPPLY OF LABOUR FOR CONSTRUCTION OF PU BLIC TOILET. THE ASSESSEE HAS NOT PAID SMALL AMOUNTS TO THE INDIVIDU AL LABOURERS, THE AMOUNT PAID IS RUNNING INTO LAKHS OF RUPEES PAID TO 113 DIFFERENT PARTIES AND IN SOME CASES, THE AMOUNTS ARE RUNNING INTO CRO RES. MOST OF THESE PARTIES ARE FIRMS. THE VERY NATURE OF WORK ASSIGNE D TO THESE PARTIES IS TO CONTRACT PUBLIC TOILET FOR THE ASSESSEE, AND THEREF ORE, IN THE NATURE OF SUB CONTRACT AND UPHELD THE ACTION OF AO. ON BIFURCATI ON OF DIFFERENT DISALLOWANCE U/S 40(A)(IA), THE LD.CIT(A) IN FIRST ROUND OF APPEAL NOTED THAT LABOUR CHARGES OF RS.3.52 CRORES ON WHICH NO T DS WAS DEDUCTED. FURTHER, ON THE AMOUNT OF RS.1.42 CRORES, TDS WAS D EDUCTED, BUT NOT DEPOSITED BEFORE DUE DATE OF FILING OF RETURN OF IN COME. THERE ARE OTHER 11 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT LABOUR CHARGES OF RS.74,50,000/- ON WHICH TDS WAS D EDUCTED AND PAID AFTER DUE DATE OF FILING OF RETURN. THE TOTAL OF T HESE FIGURES COMES TO RS.5.69 CRORES ON WHICH EITHER TDS WAS NOT DEDUCTED OR DEDUCTED AND PAID AFTER DUE DATE OF FILING OF RETURN. THE LD.CI T(A) IN SECOND ROUND OF APPEAL AFFIRMED THE ACTION OF HIS PREDECESSOR BY HO LDING THAT NO NEW FACTS HAS BEEN SUBMITTED AND HE HAS NO REASON IN DI FFERING WITH HIS PREDECESSOR. 11. WE HAVE NOTED THAT THE ASSESSEE HAS MADE EXHAUSTIVE SUBMISSION AS RECORDED BY LD.CIT(A) AT PARA 14 ON PAGES 5 TO 10 O F HIS ORDER. HOWEVER, THE LD. CIT(A) REPEATED THE ADDITION BY RE FERRING THE ORDER OF HIS PREDECESSOR DATED 08-01-2013. THE LD. CIT(A) C ONCLUDED HIS FINDING IN TWO SENTENCES ONLY. WE HAVE NOTED THAT THE ACTION OF AO AS WELL AS THE LD. CIT(A) IS BASED ON THEIR OWN ASSUMP TIONS AND PRESUMPTIONS. NEITHER THE AO NOR THE LD. CIT(A) MA DE ANY INVESTIGATION FROM ANY OF THE PARTIES, WHICH, ACCOR DING TO THE LOWER AUTHORITIES, WERE ASSIGNED / STIPULATE THE EXECUTIO N OF WORK. THOUGH NO MATERIAL TO SHOW THAT THERE WAS AN ELEMENT OF ASSIG NMENT OF WORK TO THOSE PARTIES IS BROUGHT ON RECORD. 12. THE HONBLE GUJARAT HIGH COURT IN PRASHANT S SHAH ( SUPRA) HELD THAT WHERE A RELATIONSHIP BETWEEN THE ASSESSEE AND TRANS PORTER WAS NOT THAT OF CONTRACTOR AND SUB-CONTRACTOR, SECTION 194C WAS NOT ATTRACTED. FURTHER IN 12 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT SWASTIK CONSTRUCTION (SUPRA), THE HONBLE GUJARAT H IGH COURT HELD THAT IN ABSENCE OF ANY CONTRACT ENTERED BY ASSESSEE WITH A SPECIFIC PERSON TO GET THE WORK DONE BY SUCH PERSON, THE PROVISIONS OF SECTION 194C WOULD NOT BE ATTRACTED AND THE ASSESSEE WOULD HAVE NO LIA BILITY TO DEDUCT TDS. 13. THE CO-ORDINATE BENCH OF PUNE TRIBUNAL IN DUTTA DIG AMBER SAHAKARI KAMGAR SANSTHA LTD V/S DCIT (SUPRA) HELD THAT WHEN THERE WAS NO SUB CONTRACT BETWEEN THE ASSESSEE SOCIETY AND ITS MEMBE R TO WHOM IT WAS PAYING TRANSPORT CHARGES FOR USING THEIR TANKER FOR EXECUTING A TRANSPORT CONTRACT UNDERTAKEN BY SOCIETY (ASSESSEE) AND THERE WAS NO SUB-CONTRACT BETWEEN THE ASSESSEE SOCIETY AND ITS MEMBER ( OWNER OF TANKER) AND THEREFORE, PROVISIONS OF SECTION 194C(2) WERE NOT A PPLICABLE AND THE ASSESSEE SOCIETY WAS NOT REQUIRED TO DEDUCT ANY TAX AT SOURCE. 14. IN VIEW OF THE AFORESAID DISCUSSION, WE ARE OF THE VIEW THAT THE AO WRONGLY DISALLOWED THE PAYMENT OF LABOUR CHARGES BY ASSESSEE TO VARIOUS PERSONS WITHOUT BRINGING ANY MATERIAL OR EV IDENCE ESTABLISHING THAT THERE WAS ANY CONTRACT OR SUB-CONTRACT OR ASSI GNMENT OF WORK TO THEM. IN THE RESULT, GROUND 1 OF ASSESSEES APPEAL IS ALLOWED AND GROUNDS 1 & 2 OF REVENUES APPEAL ARE DISMISSED. 15. GROUND 2 OF ASSESSEES APPEAL IS ALTERNATIVE GROUND . CONSIDERING THE FACT THAT WE HAVE ALLOWED FULL RELIEF TO THE ASSESS EE ON GROUND 1, THEREFORE, DISCUSSION ON GROUND 2 BECOMES ACADEMIC. 13 ITA NO. 5881 & 6135 /MUM/2016 JANSEVA MAJOOR SAHAKARI SANSTHA MARYADIT 16. GROUND 3 IN ASSESSEES APPEAL RELATES TO DISALLOWAN CE U/S 80P(2)(VI). THE LD.AR DURING THE COURSE OF SUBMISSION MADE STAT EMENT THAT HE WAS NOT PRESSING THIS GROUND OF APPEAL. THEREFORE, THI S GROUND OF APPEAL IS DISMISSED, AS NOT PRESSED. 17. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-03-2020. SD/- SD/- (S. RIFAUR RAHMAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 18 TH MARCH, 2020 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI