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Income Tax Officer, TDS-3, Surat Versus. Shree Chalthan Vibhag Khand Udyog Mandli Ltd.,

2015 (11) TMI 1518 - ITAT AHMEDABAD

TDS u/s 194C - non tds on contractual payments of cutting and transporting of sugarcane from the fields to the factory gate - 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 as the .....

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lant by : Shri K. Madhusudan, Sr. DR. Respondent by : Shri Mitesh S. Modi, AR ORDER PER KUL BHARAT, JUDICIAL MEMBER : This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-I, Surat ( CIT(A) in short) dated 15.11.2011 for Assessment Year 2004-05. 2. The Revenue has raised following grounds of appeal:- 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 .....

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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. 3. Briefly stated facts are that a survey u/s 133A of the Income-tax Act, 1961 (hereinafter referred to as .....

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essee in default and made an addition on account of TDS deductable and interest u/s 201(1A) of the Act. The assessee, aggrieved by the aforesaid order of the Assessing Officer, preferred an appeal before the ld. CIT(A) who after considering the submissions of the assessee allowed the appeal. Aggrieved by the above order of the ld. CIT(A), the Revenue is now in appeal before us. 3. At the outset, the ld. Counsel for the assessee submitted that the only effective ground is against the deletion of .....

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tted that it has been held by the Hon ble Gujarat High Court in Tax Appeal No. 211 of 2006 along with Tax Appeal No.440 of 2006 in assessee s own case that the supply of sugarcanes at the gates of factories of the assessee was a part of sale transaction, and therefore, the Hon ble Gujarat High Court was of the opinion that the assessee was not liable to deduct the tax. 4. We have heard the rival submissions, perused the orders of the lower authorities and material available on record. We find th .....

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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. The appellant pays advance purchase price to cane growing members to meet expenses like, harvesting, cutting and transportation. 6. First installment of &# .....

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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 that they are making advance payment of sugar cane purchase price to their farmer members. The farmers are agriculturists. Their income is taxable. It is clear that Section 194 C of .....

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