Salary paid to contractor

Hi sir,

Can a company paid salary to their contractors along with contractor bill,

Suppose, A is a company and B is a contractor for A,

A paid contractor bill to B and also paid salary to B. for A.Y. 13-14

Contractor bill paid after deduction of TDS, but salary paid without deduction of TDS (that because salary was below to taxable limit.

And such transactions have been repeated for more than 15 contractors.

My question is, is there any provision available to allow such transactions.  

I have raised this query to Mr. A. and he said there is no problem, but I think such transactions are not allowed.

Please correct me if I’m wrong.

Regards-

Renu