The assessee paid harvesting charges to the farmers as purchase price of sugarcane without deducing TDS while making payments. The farmers were responsible for harvesting and delivering the cane to the gate of the assessees factory. The AO held that TDS was to be deducted u/s. 194C and disallowed the deduction claimed by the assessee u/s. 40(a)(ia). CIT(A) upheld the action of the AO. The Tribunal held that, payments made by assessee for harvesting and transportation are to be regarded as payments made for purchase of sugarcane & hence provisions of section 194C do not get attracted. (AY.2011-12)