There was a contract (Main Contract) between local public authority and the ABC Company for setup of CETP plant (effluent treatment plant) and its operation and maintenance. Now the ABC Company has out sourced the work to PQR LTD and XYZ LTD to carry on work on his behalf on contract basis (Secoundry Contract). ABC Company is working as SPV only.
1. Now this main contract was put to the end due to certain reasons.
2. On cancellation of the contract the ABC Company was given Rs. 200 for cost incurred till date for Contract and a amount of Rs. 50/- as compensation on account of work disruption towards administrative cost and losses during the period of work suspension.
Now on distrubution of compensation received by ABC Company to PQR LTD and XYZ LTD will attract and income tax Liability (Such as TDS)??
CAclubindia
