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2020 (6) TMI 152 - AT - Income TaxDisallowance u/s 40(a)(ia) - non-deduction of tax at source from the payment made towards Harvesting charges - HELD THAT:- Sugarcane purchase agreement makes it clear that the responsibility of harvesting sugarcane and transporting them to the factory of the assessee is placed upon the farmers. It is further stated that the assessee can also arrange harvesting and transportation on behalf of the farmers on the request of the farmers and in such case, the costs incurred in that connection shall be adjusted against the Cane bill. This clause makes it clear that the assessee shall be acting on behalf of the farmers and hence the payment of harvesting charges is also made on behalf of the farmers only, which shall be adjusted against the Sugarcane bill. Hence there is merit in the submission of the assessee that the harvesting charges do not constitute its own expenditure. Following the decision rendered by the co-ordinate bench in the case of M/s NSL Sugars Ltd [2019 (11) TMI 595 - ITAT BANGALORE ] we hold that the assessee is not liable to deduct tax at source from the harvesting charges paid by it on behalf of the farmers in both the years. Accordingly, we set aside the orders passed by Ld CIT(A) in both the years and direct the AO to delete the impugned additions in both the years. - Decided in favour of assessee.
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