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TMI Blog2015 (9) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee got transported the sugar cane from the fields of farmers to its premises with the help of transporters, and if yes, then on account of its failure to deduct TDS under section 194C of the Income Tax Act, it is to be held as an assessee-in-default liable to tax under section 201 as well as interest under section 201(1A) of the Income Tax Act. 3. In response to the notice of hearing, no one has come present on behalf of the assessee. With the assistance of the learned DR, we have gone through the record carefully and proceed to dispose of the appeal ex parte qua the assessee. 4. Brief facts of the case are that the assessee is a co-operative society registered with the Registrar of Cooperative Societies, Gujarat. It is engaged in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Registrar of Cooperative Society, the highest authority of the governing Act. i.e. The Gujarat Co-Operative Societies Act, 1961. The relevant Bye Laws No. 7(A) categorically provides that the cane grower members are exclusively responsible to cut, harvest and transport their sugarcane from their field to the factory gate for which they had been paid ex-factory gate cane price by virtue of the Sugar Cane Price Control Order, 1966 of the Central Government. (ii) Copy of water stop instructions letter/card given to the cane grower members containing therein categorically the condition that the cane grower member should cut and supply his sugarcane grown on his field after the instructions to the factory gate of the sugar mill. (iii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and legal ground in support of the allegation of default u/s. 201(1) and 201(1A) of the Act. 3. Your kind attention is invited to the very fact that the Divisional Bench of ITAT, Ahmedabad has already allowed the appeal in favour of the assessee for the Asstt.Year: 2003-04 against the order passed by u/s 201(1) and 201(1 A) of the Act treating the assessee mill as assessee in default for the alleged payment of transportation and harvesting of sugarcane. Thus, as a matter of fact, the issue being identical and the same as in the present year, has already been resolved by the Hon'ble ITAT, Ahmedabad in the assessee's own case." 6. The learned AO did not apply his mind on this explanation of the assessee. He simply considered that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractors is worked out as under :- Rs.185 per MT x 17,71,699 MT Of sugar cane purchased = Rs. 32,77,64,315/-" 7. In this way, the ld.AO has held the assessee liable for transporting the sugar cane from the fields of the famers, and according to the AO, the assessee has failed to TDS on payments of transportation. Therefore, it is an assessee-in-default. He has passed an order under section 201(1) and 201(1A) working out the amount of TDS deductible at Rs. 67,19,168/- and interest for not depositing this amount in Government Treasury at Rs. 64,50,400/-. The learned AO has raised demand of Rs. 1,31,69,568/-. 8. On appeal, the ld.CIT(A) has deleted the additions by assigning following ten reasons: "[1] The appellant pays ex-factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport 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 Section 194C of the IT Act is not applicable in appellant's case. Having regard to the facts and circumstances of the case as well as arguments of the appellant and the Judgment of Hon'ble ITAT, it is held that the assessing officer is not justified in invoking the provisions of Sec. 194C against the appellant. The Assessing Officer's action of treating the appellant as 'assessee in default and working out liability u/s.201 & 201(1A) is not sustainable." 9. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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