2015 (11) TMI 1518

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....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 Rs. 36,68,470/- and Rs. 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 fields to the factory gate u/s 194C of 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 Assessin....

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....vour of the assessee by the decision of Hon'ble Gujarat High Court in Tax Appeal No. 211 of 2006 with Tax Appeal No.440 of 2006 in assessee's own case. However, the ld. Departmental Representative opposed the submission of the ld. Counsel for the assessee. He submitted that the ld. CIT(A) was not justified in deleting the impugned addition. On the contrary, the ld. Counsel for the assessee submitted 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....

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....e is determined by the appellant. [7] Copy of Member v s account in appellant's books indicate that first installment of Rs. 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 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 the I T Act is n....