No TDS applicable u/s 194C of Income Tax Act towards Casual labour expenses incurred for Road Construction, Crane Hiring and Site Machine Shifting: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) Delhi bench held that no Tax Deduction at Source (TDS)  applicable under Section 194C of the Income Tax Act, 1961 towards the casual labour expenses incurred for road construction, crane hiring and site machine shifting.

Assessee, Amtech Engineers 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 sub-contract basis in remote areas. 

During the year the assessee  received a sub-contract and to execute such sub-contract the assessee incurred casual labour expenses like site machine shifting expenses, road construction expenses, crane hiring charges. Thus  the assessee during the assessment proceedings submit that the provisions of Section 194C are not applicable to these transactions. Even Though  did not accept the submission. Therefore when filed appeal before the CIT(A) who dismissed the appeal of the assessee.

Therefore the assessee filed a second appeal before the tribunal.

During the appeal proceedings Sanjay Sharma, counsel for assessee submitted that expenses of site road construction  crane hiring and site machine shifting are labour expenses.

However due to a lack of understanding, specifically interpretation problems regarding whether TDS should be deducted or not, and the absence of professionals to serve as advisors on the matter, the assessee has not deducted or deposited TDS on the aforementioned payments.

Kanav Bali, Counsel for Revenue supported the decision of assessing officer.

After reviewing the contentions of the both parties  the two member bench of Dr B.R.R. Kumar (Accountant Member) and C.M. Garg (Judicial Member) dismissed the appeal of the assessee held that no Tax Deduction at Source (TDS) is applicable under Section 194C of the Income Tax Act towards the casual labour expenses incurred for road construction, crane hiring and site machine shifting.

To Read the full text of the Order CLICK HERE

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