Case Number: ITA 5918/DEL/2019
Appellant: Amtech Engineers, Delhi
Respondent: ITO Ward 62(1), New Delhi
Assessment Year: 2010-11
Order Type: Final Tribunal Order
Date of Order: 2023-09-14
Pronounced On: 2023-09-14
Case Filed On: 2019-07-08
This appeal was filed by the assessee, Amtech Engineers, challenging the order dated 16.04.2019 passed by the learned Commissioner of Income Tax (Appeals)-20, New Delhi, for the assessment year 2010-11. The case was heard before the Delhi Bench ‘A’ of the Income Tax Appellate Tribunal (ITAT).
The hearing was conducted on 10.08.2023, with Shri Sanjay Sharma, Adv., and Shri M. A. Ansari, AR, representing the assessee, and Shri Kanav Bali, Sr. DR, representing the Revenue. During the hearing, the following grounds were raised by the assessee:
The Ld. A.O. has made an addition of Rs. 73,10,000/- u/s 40(a)(ia) of Income Tax Act, 1961 on expenses which was duly communicated to him that out of expenses, expenses of Rs. 36,50,000/- is in the nature of petty labour expenses hence such sum is not liable for TDS Compliance & expenses of Rs. 36,60,000/- is in the nature of crane hire charges which may be subject matter of TDS but TDS was not deducted due to interpretation issues & in bonafide belief that whether TDS to be deducted or not.
The assessee is a partnership firm engaged in providing mechanical engineering services like fabrication, erection, and laying of piping equipment, steel structural work, civil work painting, etc., to its clients on a sub-contract basis in remote areas.
During the year under consideration, the assessee received a sub-contract and to execute such sub-contract, incurred casual labour expenses like site machine shifting expenses for shifting of machinery from one place to another and road construction expenses for preparing structural foundation involving labour and material expenses. The assessee made payments for labour charges and for accounting purposes entered the same in the name of a single person. It was submitted that this was done due to lack of accounting knowledge and ease of accounting entries, where multiple entries were reduced to a single accounting entry. Hence, the provisions of section 194C were argued not to be applicable to these transactions.
The Tribunal, after reviewing the case, made the following observations:
The Tribunal concluded the order as follows:
Owing to the decision of the Tribunal on the above grounds, the Stay Application of the assessee becomes infructuous and hence dismissed. In the result, the appeal of the assessee is allowed and the SA of the assessee is dismissed.
Order pronounced in the open court on 14.09.2023.
Sd/- (C. M. Garg) JUDICIAL MEMBER
Sd/- (Dr. B. R. R. KUMAR) ACCOUNTANT MEMBER
Order: The appeal of the assessee is allowed and the stay application is dismissed.
Pronounced on: 14th September 2023
Judicial Member: C. M. Garg
Accountant Member: Dr. B. R. R. Kumar
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT ‘A’ Bench, Delhi
6. Guard File
Assistant Registrar, ITAT Delhi Benches, Delhi
Amtech Engineers vs ITO Ward 62(1), New Delhi – TDS Compliance on Expenses
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