Commissioner Of Income Tax v. The Shahabad Cooperative Sugar Mills Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 246 of 2011 Date of Decision: 1.8.2011 Commissioner of Income Tax ....Appellant. Versus The Shahabad Cooperative Sugar Mills Ltd. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL,ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Senior Standing Counsel,for the appellant. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) againstthe order dated 19.11.2010 passed by the Income Tax AppellateTribunal, Delhi Bench “G”, New Delhi (hereinafter referred to as “theTribunal”) in ITA No. 2147/Del/2000, relating to the assessment year1995-96, claiming the following substantial question of law:- “Whether on the facts and in the circumstances ofthe case, the Ld. Income Tax Appellate Tribunal wasright in law in holding that manufacturing of Sugarfrom sugarcane is marketing of agricultural producegrown by the members of the assessee society andthe assessee society is eligible for deduction u/s 80P (2)(a)(iii) of the Act, despite the fact that (a)manufacture of sugar from sugarcane resultedin the emergence of totally a new substance,which is a commercial produce; and in the emergence of totally a new substance,which is a commercial produce; and (b)in the manufacturing process, in fact, theassessee incurred all the expenditure on itsown and marketed the sugar in its own nameand as such it cannot be said that the sugarwhich was sold by the assessee belonged toits members?”assessee incurred all the expenditure on itsown and marketed the sugar in its own nameand as such it cannot be said that the sugarwhich was sold by the assessee belonged toits members?” 2.Put shortly, the facts necessary for adjudication as narratedin the appeal are that the assessee is manufacturer of sugar fromsugarcane. It filed return for the assessment year 1995-96 on30.10.1995 declaring an income of Rs.1,02,28,177/-. The said returnwas proceeded under Section 143(1)(a) of the Act on 24.1.1996. Theassessee claimed deduction under Section 80P(2)(a)(iii) of the Actamounting to Rs.7,44,02,612/-. The Assessing Officer vide order dated2.2.1998 rejected the claim of the assessee. Feeling aggrieved, theassessee took the matter in appeal before the Commissioner of IncomeTax (Appeals) [in short “the CIT(A)”] who vide order dated 17.2.2000upheld the order of the Assessing Officer and dismissed the appeal. Onfurther appeal by the assessee, the Tribunal vide order dated23.11.2004 dismissed the appeal following the orders of the earlieryears of the Tribunal in the case of the same assessee.Against theorder of the Tribunal, the assessee filed an appeal before this Court(ITA No. 165 of 2005) and this Court vide order dated 12.10.2009 set aside the order of the Tribunal and remanded the matter for freshdecision in accordance with law. The department took the matteragainst order dated 12.10.2009 remanding the matter to the Tribunalbefore the Hon'ble Supreme Court by way of an SLP which is pending.Thereafter, the Tribunal vide order dated 19.11.2010 allowed the appealof the assessee holding that the issue had already been decided infavour of the assessee by relying upon the Full Bench decision of thisCourt in Bhudewal Cooperative Sugar Mills v. Commissioner ofIncome Tax [2009] 315 ITR 351 (P&H). Hence, the present appeal bythe revenue. 3.It was fairly conceded by the learned counsel for therevenue that the Full Bench judgment in Bhudewal Cooperative SugarMills' case (supra) was applicable to the facts of the present case. 4.In view of the above, we do not find any merit in the appeal.No substantial question of law arises in this appeal. The appeal standsdismissed. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL)ACTING CHIEF JUSTICE