DCIT, TDS, CHANDIGARH vs. M/S PUNJAB AGRO FOOD GRAINS CORP. LTD., SANGRUR

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ITA 75/CHANDI/2018Status: DisposedITAT Chandigarh20 November 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal, following a previous decision in a group case, held that the assessee was not liable to deduct TDS on the by-products of paddy given to millers for milling. The appeals of the Revenue were decided in favour of the assessee.

What were the facts?

The Revenue appealed against the CIT(A)'s order concerning the non-deduction of TDS by the assessee on payments made to millers. The dispute centered on whether TDS was applicable to payments made in kind or on the by-products retained by millers.

What were the issues?

Whether TDS provisions under Section 194C are applicable to payments made in kind or on by-products retained by millers for milling services.

Which sections of the Income-tax Act were involved?

Section 194C,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeals have been preferred by the Revenue against the separate orders dated 27.11.2017 of the Commissioner of Income Tax (Appeals), Patiala [hereinafter referred to as CIT(A)].

2, In this appeal, the Revenue has taken the following grounds:- (i) Has the Ld. CIT (A) not erred in ignoring the legal position that the provisions of section 194C are squarely applicable on the work carried out by the millers who are under contract with the procurement agency/assessee ? (ii) Has the Ld. CIT(A) not erred in not upholding the Tax demand created on account of non / short deduction of tax u/s 201(1)/201(1A) of the Income-tax Act, 1961 ignoring the fact that the assessee deductor applied provisions of section 194C on the cash part of the payments but not on the payments but not on the payments which were made in kind?

ITA Nos. 75 & 76/Chd/2018- M/S Punjab agro Food grains Corporation Ltd.., Sangrur 2

• (iii) Has the Ld. CIT(A) not erred in linking the facts of present case with the case of Ahaar Consumer Products Pvt. Ltd. wherein the Hon'ble ITAT, Bench 'A', New Delhi finds that - ' It is just an exchange and barter of one commodity against the other and the whole contract cannot be termed as works contract.' (iv) Has the Ld.CIT(A) not erred in linking the judgment of Hon'ble ITAT, Bench 'A', New Delhi in the case of M/s Ahaar Consumer Products Pvt. Ltd., with the facts of the present case when the case of M/s Ahaar Consumer Products Pvt. Ltd,, did not involve any payment of consideration for the services rendered whereas in the present case execution of work upon supplied material is in lieu of payments on which TDS has also been deducted by the assessee? (v) Has the Ld.CIT(A) not erred in holding that the assessee has not paid any sum except milling charges @Rs,15/- per quintal) to the millers given that the milling charges paid in cash are not adequate remuneration for the services obtained under contract, and that the millers have complete control over the byproduct retained by them which should thus constitute income of the recipient as held by the Hon'ble Supreme Court in M/s Kanchanganga Sea Foods Ltd vs. Commissioner of Income Tax in its order dated 07.07.2010 ?

(vi) Has the Ld.CIT(A) not erred in ignoring the judgment of the Hon'ble Supreme Court in M/s Kanchanganga Sea Foods Ltd vs Commissioner of Income Tax in its order dated 07.07.2010, wherein the Hon'ble Court has upheld the applicable of TDS provisions even if the payment made is not in cash ?

3.

At the outset, Ld. Counsel for the assessee has invited our attention

to the order dated 30.10.2018 passed on the issue in the group cases with a

lead case ‘ITO (TDS) Vs. The Distt. Manager, M/s Punjab Warehousing

Corporation, Sirhind & others’ in ITA Nos. 1309 & 1310/Chd/2016 and

has stated that the issue raised is squarely covered by the aforesaid

decision of the Tribunal.

4.

The Ld. DR has strongly relied upon the findings of the Assessing

officer.

ITA Nos. 75 & 76/Chd/2018- M/S Punjab agro Food grains Corporation Ltd.., Sangrur 3

5.

We find that the aforesaid decision of the Tribunal dated 30.10.2018 (supra) in the group cases with a lead case in ITA Nos. 1309 & 1310/Chd/2016, relied upon by the assessee, has recently been delivered by this Bench of the Tribunal (Bench consisted by both of us), hence, following the principle of consistency, the present appeals of the Revenue are decided accordingly and issue is decided in favour of the assessee by holding that the assessee was not liable to deduct TDS on the bye-products of paddy given to the millers for milling.

Both the appeals of the Revenue are therefore, dismissed. Order pronounced in the Open Court on 20.11.2018

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 20.11.2018 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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