TMI Blog2016 (4) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. As decided in assessee's own case in the case on hand, the supply of sugarcanes at the gates of factories of the respective assessees was a part of sale transaction, and therefore, we are of the opinion that the assessees are not liable to deduct TDS. - Decided in favour of assessee - ITA No.380/Ahd/2012 - - - Dated:- 2-3-2016 - Shri Rajpal Yadav, JM, and Manish Borad, 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of cutting and cost of transporting the sugarcane through transport contractors and nor there was any details regarding the amount per M T rate of harvesting and transporting 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 accordingly issued demand notice at ₹ 55,33,996/-. 3. Aggrieved, assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llment 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 payment of sugar cane purchase price to their farmer members. The farmers are agriculturists . Their income is not taxable. It is clear that Sectionl94 C of the I T Act is not applicable in appellant 's case. Having regard to the facts and circumstances of the case as well as argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree 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 passed u/s 201(1) interest charged u/s 201(1A) of the I.T. Act of ₹ 36,68,470/- and ₹ 35,21,748/- respectively, for A.Y. 2004-05 by the A.O. even though during the course of verification it was noticed that the sugarcane from field s of all the farmers was spread in large areas. Proper and cost effective management of cutting and transporting the sugarcane is done by the assessee. It is also observed that the assessee was not deduct tax on contractual payments of cutting and transporting the sugarcane from fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment from time to time. 5. The appellant pays advance purchase price to cane growing members to meet expenses like, harvesting, cutting and transportation. 6. First installment of ₹ 185/- M.T is given as advance purchase price to farmer to enable them -to meet the expenditure of harvesting, cutting, and transporting. Thereafter, purchase price is again given to farmers in installments. This account is finally settled when the final ex-factory cane price is determined by the appellant. [7] 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under:- 10. In the case on hand, the supply of sugarcanes at the gates of factories of the respective assessees was a part of sale transaction, and therefore, we are of the opinion that the assessees are not liable to deduct TDS. In view of the above discussion, the decisions relied on by Mr. Mehta shall not apply to the facts of the present case. Hence, the present appeals deserve to be allowed. 6. In the light of the above judgement of the Hon'ble jurisdictional High Court, we do not see any infirmity in the order of the ld. CIT(A) and the same is hereby upheld. Thus, the first ground raised by the Revenue is rejected. 7. All other grounds are general in nature and require no separate adjudication. 8. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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