ACIT 2(3), MUMBAI vs. THE RAVALGAON SUGAR FARM LTD, MUMBAI

PDF · subscribers
ITA 1046/MUM/2014Status: DisposedITAT Mumbai23 November 2015AY 2010-113 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 upheld the CIT(A)'s decision, stating that the transportation charges were part of the sugarcane price paid to farmers and not the assessee's direct liability, thus no TDS was required.

What were the facts?

The assessee, a sugar factory, paid transportation charges for sugarcane brought by farmers to its premises. The Revenue disallowed these charges for non-deduction of TDS, arguing it was the assessee's liability.

What were the issues?

Whether transportation charges paid by the assessee for sugarcane brought by farmers were the assessee's liability requiring TDS deduction.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI

Before: SHRI SANJAY GARG & SHRI ASHWANI TANEJA

For Appellant: Shri Jayesh Dadia, A.R
For Respondent: Shri Vishwas Jadhav, D.R
Hearing: 23.11.2015Pronounced: 23.11.2015

Per Sanjay Garg, Judicial Member:

1.

The present appeal has been preferred by the Revenue against the order dated 25.11.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2010-11.

2.

The Revenue is aggrieved by the action of the Ld. CIT(A) in deleting the disallowance of Rs.2074497/- made by the Assessing Officer (hereinafter referred to as the AO) under section 40(a)(ia) of the Income Tax Act on account of non deduction of TDS on transport charges paid by the assessee.

3.

We have heard the rival contentions and have also gone through the records. The assessee is a sugar factory. Sugarcane prices have been fixed by the government and the assessee has to pay the same to the farmers. The farmers have to bring the sugarcane to the factory and the price fixed/paid by the assessee factory includes transportation charges also. The payment of transportation charges is the liability of the farmer. However, for the sake of convenience, at the instructions of the farmers, the payment was made by the assessee directly to the transporter which was in fact included in the price of sugarcane purchased by the assessee from the farmers.

4.

The Ld. CIT(A), after going through the record of the case, has held that the assessee had no liability to pay any transportation charges rather the sugarcane was received by the assessee at its factory premises and the amount paid by the assessee on behalf of the farmers to the transporter, in fact, was part of the sale consideration paid by the assessee for the sugarcane brought by the farmers to its premises. He, therefore, has held that it was not the liability of the assessee to pay any transportation charges and hence there was no question of deduction of TDS. He has, therefore, deleted the disallowance made by the AO under section 40(a)(ia) of the Act. We do not find any infirmity in the well reasoned order of the Ld. CIT(A) and the same is therefore upheld.

5.

In the result, the appeal of the Revenue is therefore hereby dismissed.

Order pronounced in the open court on 23.11.2015.

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →