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COMMISSIONER OF INCOME TAX (TDS) Versus KHEDUT SAHAKARI KHAND UDYOG MANDLI LTD

2016 (7) TMI 926 - GUJARAT HIGH COURT

TDS u/s 194C - payments made to Mukadams and Transporters - Held that:- Considering the decision of this Court in the case of Krishak Bharati Co-operative Ltd. (2012 (10) TMI 655 - GUJARAT HIGH COURT ) wherein this Court has held that to transport the gas was a part of sale transaction, and therefore, the assessee, therein, was not required to deduct TDS, the question, which is raised in the present appeal is required to be answered in favour of the assessee. Decided in favour of the assessee - .....

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sment Year 2003-04, the revenue has preferred the present Tax Appeal for consideration of the following substantial question of law: Whether the Income Tax Appellate Tribunal is right in law and on facts in holding that the assessee was not liable to deduct tax at source under section 194 C of the Income Tax Act, 1961 from the payments made to Mukadams and Transporters? 3. The assessee is engaged in the business of manufacturing of sugar from sugarcane. On verification of TDS it was noticed that .....

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IT(A) and held that the assessee was not liable to deduct tax at source on payments made to mukadams and transporters. 4. Being aggrieved and dissatisfied with the impugned judgment and order passed by the ITAT, the revenue has preferred the present Tax Appeal for consideration of the aforesaid substantial question of law. 5. Mr. Manish Shah, learned Counsel appearing on behalf of the respondent - assessee has submitted that as such the issue involved in the present Tax Appeal is now not res int .....

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e factory. Meaning thereby, here, the supply of sugarcane at the gate of the factories of the assesses is not a separate work contract, but, it is essentially the part of the sell transaction. In that view of the matter, here, it would be relevant to refer to the decision of this Court in CIT (TDS) VS. KRISHAK BHARTI COOPERATIVE LTD.(Supra). In that case, the assessee was engaged in the manufacture of fertilizers and for the said purpose, it used to consume natural gas. The assessee, therein, wa .....

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therein, was not required to deduct TDS. In our view, therefore, the decision of the Apex Court in the case of CIT (TDS) VS. KRISHAK BHARTI CO-OPERATIVE LTD.(Supra) applies in full force to the facts of this case. The aforesaid provision would apply to the person, who had paid any sum, and the respondent has not paid any charges. The case of the assessee in Tax Appeal No. 211 of 2006 is identical, and hence, the authorities below grossly erred in interpreting the provisions of law, and therefor .....

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