PAYMENTS MADE BY THE ASSESSEE TO THE EMPLOYEES EMPLOYED ON DAILY WAGE BASIS CANNOT BE SAID TO BE A CONTRACTUAL PAYMENT

Payments made by the assessee to the employees employed by it on daily wage basis cannot be said to be a contractual payment, as such the assessee in such cases was not required to deduct tax from such payments u/s. 194 C of the Act. The payments were not in the nature of payments under contract but had the character of wages. It is obvious that the liability to deduct tax under Section 194C of the said Act, only arises in case of contractual payments. Since the payments were made to the employees employed by the assessee on daily wages, they cannot be said to be contractual payments.