Dismissed

Poovath Paree & Sons, Stevedores,Db Khon v. Dy.Commissioner of Income Tax Cir-Ekm

Kerala HC18 Jan 2019ITA/482/2009

Case brief

AI extract

What is this about?

This income tax appeal concerned the liability to deduct tax at source (TDS) under Section 194C for payments made to labour agencies. The High Court rejected the appeal, holding that an implied contract existed to maintain industrial peace, rendering the assessee liable for TDS despite the lack of a written agreement.

What did the court decide?

Appeal rejected; no interference with the order of the Tribunal while; parties to suffer respective costs in the appeal.

Poovath Paree & Sons, Stevedores,Db Khon Vs Dy.Commissioner of… — Income Tax | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

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THE HONOURABLE MR. JUSTICE ASHOK MENON

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FRIDAY, THE 18TH DAY OF JANUARY 2019 / 28TH POUSHA, 1940

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ITA. No.482 of 2009

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AGAINST THE ORDER IN ITA NO.647/2008 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 30-01-2009

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APPELLANT/APPELLANT:

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POOVATH PAREE & SONS, STEVEDORES, DB KHONA BUILDINGS SUBRAMANIAN ROAD, WILLINGDON ISLAND, KOCHI-3, REPRESENTED BY ITS MANAGING PARTNER, MR. P.H.SADIQ.

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BY ADVS. SRI.E.K.NANDAKUMAR (SR.) SRI.ANIL D. NAIR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS

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RESPONDENT/RESPONDENT:

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COMMISSIONER OF INCOME TAX C.R. BUILDINGS, I.S. PRESS ROAD ERNAKULAM, COCHIN-682 018.

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[AMENDED AS PER ORDER DATED 18.01.2019 IN I.A. NO.1898 OF 2013] BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

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THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA. No.482 of 2009

JUDGMENT

K. Vinod Chandran, J.

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The assessee/appellant is a stevedore, who is mainly engaged in the activity of stuffing and de-stuffing containers, arriving and leaving from the Cochin Port. The assessee engaged manual labour for the stuffing and de-stuffing.

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The assessee being a part of the Stevedores' Association, engages workers from two agencies, so as to ensure a parity of work allotted to the manual labourers who are normally engaged in the Port.

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2. The manual labourers formed themselves into associations/firms which are the agencies supplying them for carrying out the work in the port. The payments made to two of such entities are the issue raised herein. The assessee had been engaging workers from an association named

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ITA. No.482 of 2009 3

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'USA Pool' and a firm called 'Hash Agencies'. Payments were made to the agencies, for which no deduction of tax was made at source as provided under Section 194(C) of the Income Tax Act, 1961 [for brevity, 'the Act'].

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3. The assessee before the First Appellate Authority and Tribunal claimed that there was absolutely no contract between the assessee and the association/firm. The assessee had been engaging workers and the payments due to the individual workers were paid through the agencies. The amounts received by the agencies were merely distributed among the workers was the contention.

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4. On facts, the First Appellate Authority found that the payment made is far in excess of the wage liability to the workers employed by the assessee. Though the First Appellate

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ITA. No.482 of 2009

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Authority also found that there could be necessarily expenses with respect to the pooling of workers, ensuring their welfare and so on and so forth, there was always a profit earned by the agencies from the amounts collected for the manual labour carried out.

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5. The assessee's contention lay more

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emphasis on the absence of a written contract as such. The First Appellate Authority correctly found that there is no requirement for a written

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contract. There is definitely an implied contract, since it is for the purpose of maintaining industrial peace and ensuring parity in employment of manual labour, that the Association of Stevedore has devised a measure, by which its members employ persons from the two

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agencies, in which the different manual labourers are enrolled.

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ITA. No.482 of 2009

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6. There is definitely an implied contract

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and we cannot absolve the assessee from the liability to deduct tax at source merely on the ground of there existing no written contract. We are of the opinion that the payments made by the assessee clearly come under the rigor of Section 194C of the Act. We do not find any reason to interfere with the order of the Tribunal and we also do not discern any question

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of law as arising from the order of the Tribunal. We hence reject the appeal and leave the parties to suffer their respective costs in the appeal.

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Sd/-

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K. VINOD CHANDRAN JUDGE

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Sd/-

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ASHOK MENON JUDGE

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//True Copy// P.A. To Judge

sp/22/01/19

ITA. No.482 of 2009

APPENDIX

PETITIONER'S EXHIBITS:

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ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 18.12.2007 ISSUED BY THE RESPONDENT FOR THE YEAR 2005-2006. ANNEXURE B TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 26.03.2008. ANNEXURE C TRUE COPY OF THE ORDER OF THE FIRST APPELLATE AUTHORITY DATED 30.01.2009.

Poovath Paree & Sons, Stevedores,Db Khon v. Dy.Commissioner of Income Tax Cir-Ekm

Case brief

What is this about?

What did the court decide?

Poovath Paree & Sons, Stevedores,Db Khon v. Dy.Commissioner of Income Tax Cir-Ekm

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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