9911796707
TMI Blog2023 (8) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has rightly deleted the penalty as it entertained a bonafide belief that no tax is required to be deducted at source on harvesting charges. Appeal filed by the Revenue stand dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... f closing stock. Therefore, the question of deduction u/sec. 40(a)(ia) does not arise. 2.1. The TDS Officer rejecting the above contentions held that assessee is liable to deduct tax at source of Rs. 13,38,49,376/- on the harvesting charges and held the assessee as "assessee-in-default" u/sec. 201(1) and 201(1A) of the Income Tax Act, 1961 and raised TDS demand of Rs. 83,61,409/- and Rs. 20,06/712/- u/sec. 201(1) and 201(1A) respectively, vide order dated 30.03.2016 and issued demand notice dated 13.07.2018 too. Subsequently, the TDS Officer also initiated the penalty proceedings u/sec. 271C of the Act and show cause notice dated 01.02.2018 was issued as the assessee without reasonable cause failed to deduct tax at source under the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenmark Pharmaceuticals Ltd., [2010] 324 ITR 199 (Bom.) and by Hon'ble Gujarat High Court Khedut Sahakari Khand udyog Mandli Ltd., vs. ITO 2016-TIOL-2269- HC-AHM-IT etc. The learned CIT(A) has rightly deleted the penalty as the assessee was under bonafide belief that there was no obligation to deduct TDS on the harvesting charges. 5. We have heard the rival submissions and perused the material available on record. The issue in the present case relates to levy of penalty u/sec. 271C of the Act on harvesting charges paid by the assessee company. No doubt the TDS Officer had held the assessee as the assessee-in-default for non-deduction of tax at source on the payments made to harvesting contractors rejecting the contention of the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts under the agreement to the farmers for delivery of sugarcane at the factory of the respondent. Therefore, no occasion to deduct any TDS on such payment can arise". Further the Honorable Bombay High Court in the case of CIT Vs Glenmark Pharmaceuticals (supra) held that "there is no TDS on purchase of goods". Similarly, Hon'ble Gujarat High court in the case of Khedut Sahakari Khand Udyog Mandli Ltd (supra) has held that "there is no liability to deduct the tax at source on payments made to Mukadam and transport contractor for supply of sugarcane to sugarcane factories". The SLP filed by the Revenue has also been dismissed by Hon'ble Supreme Court of India. In the circumstances and from the legal position above, it is clear that the harve ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
