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Income-tax Officer (TDS) -4, Surat Versus Shri Mahuva Pradesh Sahakari Khand Udyog Mandali Ltd.

2016 (4) TMI 302 - ITAT AHMEDABAD

TDS u/s 194C - contractual payments of cutting and transporting the sugarcane from fields to the factory gate - assessee in default - Held that:- There is no dispute with regard to the fact that the payment @ ₹ 185/- P.M.T. was given as advance purchase price to farmers to enable them to meet the expenditure of harvesting, cutting and transporting. Therefore, in our considered view, the Assessing Officer was not justified in making the assessee liable for deducting the tax on such payments .....

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rad, AM For The Appellant : Mrs. Samogyan Pal, Sr.DR For The Respondent : Shri Mitesh Modi, AR ORDER PER Manish Borad, Accountant Member. This appeal of the Revenue is directed against the order of ld. CIT(A)-I, Surat, dated 15/11/2011. Order u/s 201(1) & 201(1A) of the Income-tax Act, 1961 (in short the Act) for Asst. Year 2004-05 was framed by ITO(TDS)-4, Surat. Revenue has raised the following grounds:- 1. The ld. CIT(A) erred in law as well as facts of the case in deleting the order pass .....

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he sugarcane from fields to the factory gate u/s 194C of the IT Act. 2. On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the AO. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 4. It is, therefore, prayed that the order of the ld. CIT(A) may be cancelled and that of the AO may be restored to the above effect. 2. Briefly stated facts as culled out from the records are that the assessee is a C .....

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sporting contract expenditure. In absence of these details ld. Assessing Officer adopted the rate of ₹ 205 per MT on total sugarcane purchased of 671854.330 MT of sugar cane giving rise to the figure of ₹ 13,77,30,138/- only and treated it as expenditure towards harvesting and transporting contract and accordingly applied TDS rate of 2% on ₹ 13,77,30,138/- and calculated TDS deductible at ₹ 28,23,468/- and interest u/s 201(1A) of the Act at ₹ 27,10,528/- and accordi .....

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e appellant. [1] The appellant pays ex- factory / gate delivery cane price to Cane growers. [2] The farmer member is responsible to cut his sugarcane and supply the same at the factory gate of the appellant. [3] Payments made to cane growing farmer members of the Co - op Society is in the nature of purchase price, on which section 194 C does not apply. [4] The appellant pays ex- factory / gate delivery price to farmers as per maximum price fixed by the Central Government from time to time. [5] T .....

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pellant 's books indicate that first installment of ₹ 185/ P.M.T given to farmers is actually advance purchase price of sugar cane. [8] The A.O. has worked out the total payment covered U/s 194C on the basis of pure estimate based on last years payment to farmer members. [9] The arguments of the appellant are quite convincing. The A.O. has hardly been able to support his case with cogent reasons / credible evidence. The crux of the argument of appellant is that they are making advance .....

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ating the appellant as 'assessee in default' and working out liability u/s 201 & 20i(lA) is not sustainable. In view of the above, all the grounds of appeal from SI. No. 1 to 7 are decided in favour of the appellant. In the result, appeal stands ALLOWED. 4. Aggrieved, Revenue is now in appeal before the Tribunal. 5. The ld. DR supported the observations made by the Assessing Officer. 6. On the other hand ld. AR submitted that the issue under appeal is now squarely covered in favour o .....

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ts of cutting and transporting the sugarcane from the field to the sugarcane factory under the provisions of section 194C of the Act. On going through the submissions of ld. AR, we find that similar grounds have been adjudicated by the co-ordinate bench in the case of ITO vs. Shree Chalthan Vibhag Khand Udyog Mandli Ltd in ITA No. 378/Ahd/2012 AY2004-05, wherein the grounds taken by the Revenue were as under :- 1. The Ld. CIT(A) erred in law as well as facts of the case in deleting the order pas .....

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porting the sugarcane from fields to the factory gate u/s 194C of the I.T. Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. 4. It is, therefore, prayed that the order of the Ld. CIT(A) may be cancelled and that of the Assessing Officer may be restored to the above effect. 8. The co-ordinate bench has decided the .....

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nt clinch the matter in favour of the appellant. 1. The appellant pays ex-factory / gate delivery cane price to Cane growers. 2. The farmer member is responsible to cut his sugarcane and supply the same at the factory gate of the appellant. 3. Payments made to cane growing farmer members of the Co -op Society is in the nature of purchase price, on which section 194 C does not apply. 4. The appellant pays ex- factory / gate delivery price to farmers as per maximum price fixed by the Central Gover .....

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Copy of Member v s account in appellant's books indicate that first installment of ₹ 185/ P.M.T given to farmers is actually advance purchase price of sugar cane. 7. The A.O, has worked out the total payment covered U/s 194C on the basis of pure estimate based on last years payment to farmer members. 8. The arguments of the appellant are quite convincing. The A.O. has hardly been able to support his case with cogent reasons / credible evidence. The crux of the argument of appellant is .....

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ssessing Officer's action of treating the appellant as 'assessee in default' and working out liability u/s 201 & 201(1A) is not sustainable." 5. There is no dispute with regard to the fact that the payment @ ₹ 185/- P.M.T. was given as advance purchase price to farmers to enable them to meet the expenditure of harvesting, cutting and transporting. Therefore, in our considered view, the Assessing Officer was not justified in making the assessee liable for deducting the .....

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