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2014 (6) TMI 986 - AT - Income TaxTDS u/s 194C and 194H - assessee purchased sugarcane from the farmers and has made payments to the harvesting and transport contractors without deduction of TDS - Held that:- Since in the instant case it has been categorically observed that the price fixed for sugarcane is negotiated on ex-factory gate basis and the responsibility to harvest and transport the sugarcane is on the cane growing farmers and since such transportation and harvesting charges and commission paid by the assessee have not been claimed as separate deduction by the assessee and the same have been deducted from the purchase price of cane paid to the farmer and the assessee only has made the payment on behalf of the farmer to the harvesting and transport contractors, therefore, the provisions of s. 194C and 194H, in our opinion, are not applicable to the facts of the present case. We find from the assessment order for the asst. yr. 2005-06 passed under s. 143(3) on 15th Dec., 2008 that no such disallowance was made in the said scrutiny assessment order. Further, the submission of the learned counsel for the assessee that in the past years also there was no such disallowance under s. 40(a)(ia) could not be controvered by the learned Departmental Representative. The various decisions relied on by the learned Departmental Representative are distinguishable and not applicable to the facts of the present case. - Decided in favour of assessee Disallowance of Bakshish under s. 40(a)(ia) - CIT(A) deleted the disallowance holding that the Bakshish paid to the harvesting and transport contractors directly by the assessee sugar factory is made on belief of sugarcane grower farmers - Held that:- It is the submission of the learned counsel for the assessee that such payment is made on completion of every harvesting season although the assessed is not contractually liable for such payment. However, same is paid to maintain good relationship with the labour force who come from outside Nashik and Marathawada Regions. It is also the submission of the learned counsel for the assessee that each individual payment is less than ₹ 20,000 and therefore tht provisions of s. 194C will not be applicable. The learned Departmental Representative could not controvert the above submission of the learned counsel for the assessee. Further, no such disallowance was made in the past yeas. The assessee has not claimed separately any such expenditure and the same has been debited to the purchase of sugarcane account. In view of our reasonings given in the preceding paras, we find no infirmity in the order of the CIT(A) deleting the disallowance - Decided in favour of assessee
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