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2015 (9) TMI 433 - AT - Income TaxFailure to deduct TDS under section 194C - assessee got transported the sugar cane from the fields of farmers to its premises with the help of transporters - assessee-in-default liable to tax under section 201 as well as interest under section 201(1A) - CIT(A) deleted the disallowance - Held that - Assessee s contention that it has not got the sugar cane transported with the help of contractor rather, it was obligation of the farmers to supply sugar cane at the factory gate was nowhere recorded any by AO in his findings that it is the responsibility of the assessee to get the sugar cane transported from the fields of the farmers to the factory premises. The AO is totally silent in his order. On the other hand, the assessee has made reference to the resolutions, bye-laws and standing orders in this respect. The ld.First Appellate Authority has also considered the submission of the assessee in details, and thereafter recorded a finding that the assessee was not at all responsible for transportation of the sugar cane. Thus, section 194C is not applicable in the present situations. The ld.CIT(A) has rightly deleted the demand raised by the AO. - Decided in favour of assessee.
Issues:
- Appeal against order of CIT(A)-I, Surat dated 28.6.2011 for Asstt. Year 2004-05. - Whether assessee liable for not deducting TDS under section 194C for transporting sugar cane from farmers' fields to premises. - Applicability of sections 201 and 201(1A) of the Income Tax Act. - Assessment of TDS amount and interest for non-deduction. - Deletion of additions by CIT(A) based on detailed reasons. Issue 1: Appeal Against CIT(A) Order The Revenue appealed against the order of CIT(A)-I, Surat dated 28.6.2011 for the Assessment Year 2004-05. Issue 2: Liability for TDS Deduction The main issue revolved around whether the assessee was liable for not deducting TDS under section 194C for transporting sugar cane from farmers' fields to its premises with the help of transporters. The AO contended that the assessee failed to deduct TDS on such payments, leading to orders under sections 201(1) and 201(1A) of the Income Tax Act. Issue 3: Applicability of Sections 201 and 201(1A) The AO held the assessee liable for transporting sugar cane from farmers' fields and failing to deduct TDS on payments, resulting in orders under sections 201(1) and 201(1A) of the Income Tax Act, with a demand raised. Issue 4: Deletion of Additions by CIT(A) On appeal, the CIT(A) deleted the additions based on ten reasons, including that payments to farmers were in the nature of purchase price, not subject to section 194C, and that the AO's calculations were based on estimates without sufficient evidence. The AO's decision was based on the assumption that the assessee was responsible for transporting sugar cane, but the assessee argued that it was the obligation of farmers to supply sugar cane at the factory gate. The CIT(A) agreed with the assessee, noting that the assessee was not responsible for transportation as per resolutions, bye-laws, and standing orders. Consequently, the CIT(A) deleted the demand raised by the AO, finding section 194C not applicable in this case. In conclusion, the appeal of the Revenue was dismissed, upholding the CIT(A)'s decision to delete the additions.
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