The ITO,TDS-3, Surat V. Shree Khedut Sahakari Khand Udhyog Mandli Ltd., Surat

ITA 621/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9114 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: MITESH MODI
• Section: 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 617 & 618/AHD/2013 (ASSESSMENT YEAR: 2009-10 & 2010-11) INCOME TAX OFFICER, TDS- 4, SURAT V/S SHREE MAHUVA PRADESH SAHAKARI KHAND UDYOG MANDALI LTD. AT & POST- SUGAR FACTORY, BAMANIA, TAL. MAHUVA, DIST. SURAT PAN NO. AAAAS4731M (APPELLANT) (RESPONDENT) ITA. NO: 619 & 620/AHD/2013 (ASSESSMENT YEAR: 2009-10 & 2010-11) INCOME TAX OFFICER, TDS- 3, SURAT V/S SHREE MADHI VIBHAG KHAND UDYOG SAHAKARI MANDLI LTD., AT & PO. MADHI, BARDOLI, TAL. BARDOLI, DIST. SURAT PAN NO. AAAAS4732J (APPELLANT) (RESPONDENT) ITA. NO: 621 & 622/AHD/2013 (ASSESSMENT YEAR: 2009-10 & 2010-11) INCOME TAX OFFICER, TDS- 3, SURAT V/S SHREE KHEDUT SAHKARI KHAND UDYOG MANDLI LTD., AT & PO. BABEN, BARDOLI 394602 TAL. BARDOLI, DIST. SURAT PAN NO. AAAAS 4554N ITA NOS. 617 TO 624/AHD/2013 . A.YS. 2009- 10 & 2010-11 2 (APPELLANT) (RESPONDENT) ITA. NO: 623 & 624/AHD/2013 (ASSESSMENT YEAR: 2009-10 & 2010-11) INCOME TAX OFFICER, TDS- 3, SURAT V/S SHREE CHALTAN VIBHAG KHAND UDYOG SAHAKARI MANDLI LTD., AT & PO. SUGAR FACTORY, CHALTAN, TAL. PALSANA, DIST. SURAT PAN NO. AAAAS0477A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NARENDRA SINGH, SR. D .R. RESPONDENT BY : SHRI MITESH MODI ( )/ ORDER DATE OF HEARING : 29 -03-201 6 DATE OF PRONOUNCEMENT : 30 -03-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THESE CAPTIONED APPEALS BY THE REVENUE PERTAIN TO D IFFERENT ASSESSEES FOR DIFFERENT ASSESSMENT YEARS. ALL THESE APPEALS I NVOLVE COMMON ISSUES AND, THEREFORE, THEY WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND B REVITY. 2. THE COMMON GRIEVANCE IN ALL THESE APPEALS RELATES T O THE DELETION OF THE ADDITION MADE BY THE A.O. U/S. 201(1) AND INTER EST CHARGED U/S. 201(1A) OF THE ACT. QUANTUM MAY DIFFER IN DIFFERENT APPEALS. ITA NOS. 617 TO 624/AHD/2013 . A.YS. 2009- 10 & 2010-11 3 3. THE ASSESSEES UNDER QUESTION ARE CO-OPERATIVE SOCIE TIES REGISTERED BY REGISTRAR OF CO-OPERATIVE SOCIETY, GUJARAT. THESE S OCIETIES ARE ENGAGED IN THE MANUFACTURING OF SUGAR AND TRADING. THE SUGAR FACTORY PURCHASES THE SUGARCANE FROM ITS MEMBERS AND AFTER PROCESSING IT IS SOLD TO OTHERS THROUGH CO-OPERATIVE SOCIETIES. 4. A SURVEY ACTION U/S. 133A OF THE ACT WAS CONDUCTED AT THE OFFICE PREMISES OF THE ASSESSEES. DURING THE COURSE OF THE SURVEY PROCEEDINGS, IT WAS NOTICED THAT THE SUGARCANE FROM THE FIELDS OF ALL THE FARMERS WAS SPREAD IN LARGE AREA. IT WAS ALSO O BSERVED THAT THE SUGAR FACTORY DOES NOT DEDUCT TAX ON CONTRACTUAL PA YMENTS OF CUTTING AND TRANSPORTING THE SUGARCANE FROM FIELDS TO THE F ACTORY GATE U/S. 194C OF THE ACT. 5. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF TA X DEDUCTED AT SOURCE ON THE IMPUGNED PAYMENTS. IT WAS EXPLAINED T HAT THE LEGAL RESPONSIBILITY OF THE SUGARCANE HARVESTING AND TRAN SPORTATION TO SOCIETYS FACTORY BELONGS TO THE MEMBER. HENCE NO T DS WAS MADE AGAINST ANY SUCH PAYMENTS. IN RESPECT OF THE PAYMEN TS MADE TO MUKADAMS AND TRANSPORTERS AND COPY OF PAYMENT MADE TO FARMER MEMBERS OF THE SOCIETY WAS FURNISHED. 6. THE A.O WAS OF THE STRONG BELIEF THAT IN RESPECT OF THE PAYMENTS TOWARDS TRANSPORTATION AND HARVESTING OF THE SUGARC ANE PROVISIONS OF SECTION 194C OF THE ACT ARE CLEARLY APPLICABLE. DRA WING SUPPORT FROM THE DECISION TAKEN IN THE CASE OF SHREE KAMREJ VIBH AG SAHKARI KHAND UDYOG MANDALI LTD. FOR A.Y. 2003-04 & 2004-05. THE A.O COMPUTED THE LIABILITY IN RESPECT OF TDS AND ALSO COMPUTED I NTEREST LEVIABLE U/S. 201(1A) OF THE ACT. ITA NOS. 617 TO 624/AHD/2013 . A.YS. 2009- 10 & 2010-11 4 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT THE FIRST APPELLA TE AUTHORITY HAS ALLOWED THE APPEAL OF THE ASSESSEE ON THE SAME ISSU ES FOR A.Y. 2004- 05. IT WAS ALSO BROUGHT TO THE NOTICE OF THE FIRST APPELLATE AUTHORITY THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 3058/AHD/2009 HAS HELD THAT ASSESSEES ARE NOT LIABLE TO DEDUCT TH E TAX AT SOURCE U/S. 194C OF THE ACT. THE LD. CIT(A) WAS CONVINCED AND F OLLOWED THE ORDER OF THE TRIBUNAL AND DELETED THE IMPUGNED ADDITIONS. 8. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. AT THE VERY OUTSET, WE FIND THAT THE ISSUES ARE NO MORE RES INTEGRA AS THE DISP UTE HAS BEEN SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE B Y THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT IN TAX APPEAL NO. 211 OF 2006 WITH TAX APPEAL NO. 440 OF 2006 IN THE CASE OF SHREE CHA LTHAN VIBHAG KHAND UDYOG SAHAKARI MANDLI LTD. AND SHREE MADHI VI BHAG KHAND UDYOG SAHAKARI MANDALI LTD. THE HONBLE HIGH COURT HAD THE OCCASION TO CONSIDER THE FOLLOWING QUESTION;- WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE ASSESSEE WAS LIABL E UNDER SECTION 194C TO DEDUCT TAX FROM THE PAYMENTS MADE BY THE FARMERS SAMITI I N RESPECT OF VARIOUS EXPENSES INCLUDING LABOUR CHARGES, TRANSPORT CHARGES, INSURA NCE CHARGES ETC. ON BEHALF OF FARMERS? 9. THE HONBLE HIGH COURT HELD AS UNDER:- 9. HEARD, LEARNED COUNSELS FOR THE PARTIES AND PERU SED THE MATERIAL ON RECORD AS WELL AS THE ORDERS PASSED BY THE LEARNED CIT(A) AND THE TRIBUNAL. IT IS AN ADMITTED POSITION THAT IN THE CASE ON HAND THE ASSE SSEES-CO-OPERATIVE SOCIETIES USED TO PURCHASE THE SUGARCANES FROM THE FARMERS, O N CONDITION THAT THE FARMERS SHALL SUPPLY THE SAME AT THE GATE OF THEIR RESPECTI VE FACTORY. MEANING THEREBY, HERE, THE SUPPLY OF SUGARCANE AT THE GATE OF THE FA CTORIES OF THE ASSESSES IS NOT A ITA NOS. 617 TO 624/AHD/2013 . A.YS. 2009- 10 & 2010-11 5 SEPARATE WORK CONTRACT, BUT, IT IS ESSENTIALLY THE PART OF THE SELL TRANSACTION. IN THAT VIEW OF THE MATTER, HERE, IT WOULD BE RELEVANT TO REFER TO THE DECISION OF THIS COURT IN 'CIT (TDS) VS. KRISHAK BHARTI CO-OPERATIVE LTD.' (SUPRA). IN THAT CASE, THE ASSESSEE WAS ENGAGED IN THE MAN UFACTURE OF FERTILIZERS AND FOR THE SAID PURPOSE, IT USED TO CONSUME NATURAL GAS. THE ASSESSEE, THEREIN, WAS SUPPLIED NATURAL GAS BY DIFFERENT AGENCIES THROUGH PIPELINES. IN THAT CASE, ACCORDING TO THE REVENUE, WHILE PURCHASING THE GAS FROM DIFFERENT AGENCIES, THE ASSESSEE HAD ENTERED INTO A WORK CONTRACT FOR TRANS PORTATION OF NATURAL GAS FROM THE SELLER'S PREMISES TO THE BUYER'S CONSUMPTION PO INT, AND THEREFORE, THEY HELD THAT THE ASSESSEE, THEREIN, WAS REQUIRED TO DEDUCT TDS. HOWEVER, THIS COURT, IN THAT CASE, HELD THAT TO TRANSPORT THE GAS WAS A PAR T OF SALE TRANSACTION, AND THEREFORE, THE ASSESSEE, THEREIN, WAS NOT REQUI RED TO DEDUCT TDS. IN OUR VIEW, THEREFORE, THE DECISION OF THE APEX COURT IN THE CA SE OF 'CIT (TDS) VS. KRISHAK BHARTI COOPERATIVE LTD.'(SUPRA) APPLIES IN FULL FOR CE TO THE FACTS OF THIS CASE. THE AFORESAID PROVISION WOULD APPLY TO THE PE RSON, WHO HAD PAID ANY SUM, AND THE RESPONDENT HAS NOT PAID ANY CHARGES. THE CA SE OF THE ASSESSEE IN TAX APPEAL NO. 211 OF 2006 IS IDENTICAL, AND HENCE, THE AUTHORITIES BELOW GROSSLY ERRED IN INTERPRETING THE PROVISIONS OF LAW, AND TH EREFORE, THE GROUNDS URGED BY THE APPELLANT FIND FAVOUR WITH US. 10.IN THE CASE ON HAND, THE SUPPLY OF SUGARCANES AT THE GATES OF FACTORIES OF THE RESPECTIVE ASSESSES WAS A PART OF SALE TRANSACTION, AND THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSES ARE NOT LIABLE TO DEDUCT TDS. IN VIEW OF THE ABOVE DISCUSSION, THE DECISIONS RELIED ON BY MR. MEHTA SH ALL NOT APPLY TO THE FACTS OF THE PRESENT CASE. HENCE, THE PRESENT APPEALS DESERVE TO BE ALLOWED. 11. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. TH E ORDERS OF THE TRIBUNALS, DATED: 31.08.2005, ARE QUASHED AND SET ASIDE. THE Q UESTION OF LAW ARISING IN THESE APPEALS IS ANSWERED IN FAVOUR OF THE APPELLAN T-ASSESSES AND AGAINST THE RESPONDENT-REVENUE. NO ORDER AS TO COSTS. 10. AS THE ISSUES ARE NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH ITA NOS. 617 TO 624/AHD/2013 . A.YS. 2009- 10 & 2010-11 6 COURT, WE DECLINE TO INTERFERE. ALL THESE APPEALS A RE ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 03 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD