Itxa/3440/2010 Of The Commissioner Of Income Tax -Iv Pune v. Vitthal Sahakari Sakhar Karkhana Ltd

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3440 OF 2010 The Commissioner of Income Tax-IV ..Appellant. V/s. Shri Vitthal Sahakari Sakhar Karkhana Ltd. ..Respondent. Mr. Vimal Gupta for the appellant. Mr. Mihir Naniwadekar for the respondent. CORAM : J.P. DEVADHAR AND SMT. R.P.SONDURBALDOTA JJ. DATED : 29TH JUNE, 2011 P.C. :- 1.The revenue has raised framed 7 questions in this appeal. However, counsel for the revenue states that questions F & G are different facet of similar questions A & B, therefore, questions F & G are not pressed. The questions A to E read thus:- A.Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting the addition made by the assessing officer in respect of excess cane price paid by the Co-operative Society in excess of CMP (common minimum price) fixed by both Central Government and State Government after the finalization of the financial results ?ITAT was justified in deleting the addition made by the assessing officer in respect of excess cane price paid by the Co-operative Society in excess of CMP (common minimum price) fixed by both Central Government and State Government after the finalization of the financial results ? B.Whether on the facts and in the circumstances of the case, the ITAT was justified in confirming the decision of the ITAT in holding that the provisions of Section 40A(2) are not applicable in the case of Co-operative Society in respect of payments made to both members and non members for the purchase of cane in excess of the statutory price fixed. The provisions of Section 40A (2) are in relation to unreasonable and excess payments made by the assessee. Therefore, the provisions are applicable in the case of the assessee ?ITAT was justified in confirming the decision of the ITAT in holding that the provisions of Section 40A(2) are not applicable in the case of Co-operative Society in respect of payments made to both members and non members for the purchase of cane in excess of the statutory price fixed. The provisions of Section 40A (2) are in relation to unreasonable and excess payments made by the assessee. Therefore, the provisions are applicable in the case of the assessee ? C.Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting the addition made by A.O. u/s.37(1) being excess cane price paid to members and non members of the society in excess of permission as per clause 3(1) of sugar control order 1966 of Central Government ?ITAT was justified in deleting the addition made by A.O. u/s.37(1) being excess cane price paid to members and non members of the society in excess of permission as per clause 3(1) of sugar control order 1966 of Central Government ? D.Whether on the facts and in the circumstances of the case, the ITAT was justified in confirming the action of ITAT in deleting the addition made on account of excess cane price paid to members as well as non members ?ITAT was justified in confirming the action of ITAT in deleting the addition made on account of excess cane price paid to members as well as non members ? D.Whether on the facts and in the circumstances of the case, the ITAT was justified in confirming the action of ITAT in deleting the addition made on account of excess cane price paid to members as well as non members ?ITAT was justified in confirming the action of ITAT in deleting the addition made on account of excess cane price paid to members as well as non members ? E.Whether on the facts and in the circumstances of the case, the ITAT was justified in allowing the sale of sugar at concessional rate to members of the society in spite of the fact that the cane prices are decided every year by the Government of Maharashtra after considering all the necessary facts and any concessional rate is unreasonable and excess particularly the matter is pending before the Supreme Court in case of Manjara SSK Ltd. bearing ITA No.647 of 2004 and in law the Apex Court has held in case of Dharmendra Textiles that the law passed by the legislature cannot be stretched beyond the legislative intent ?ITAT was justified in allowing the sale of sugar at concessional rate to members of the society in spite of the fact that the cane prices are decided every year by the Government of Maharashtra after considering all the necessary facts and any concessional rate is unreasonable and excess particularly the matter is pending before the Supreme Court in case of Manjara SSK Ltd. bearing ITA No.647 of 2004 and in law the Apex Court has held in case of Dharmendra Textiles that the law passed by the legislature cannot be stretched beyond the legislative intent ? 2.As regard questions A to D are concerned, similar questions raised by the revenue in the case of The Commissioner of Income Tax-III, Pune V/s. Kisanveer Satara SSK Ltd. [Income Tax Appeal no.3321 of 2010] decided on 24/6/2011 has been restored back to the file of CIT(A) for fresh decision in the light of the judgment of the Apex Court in the case of Dy. Commissioner of Income-tax, Nashik V/s. Shri Satpuda Tapi 3 itxa3440-10 Parisar SSK Ltd. reported in (2010) 189 Taxman 81 (SC). Accordingly so far as questions A to D are concerned, the matter is restored to the file of CIT(A) for fresh consideration in the light of the aforesaid decision of the Apex Court. 3.As regards question E is concerned, similar question raised by the revenue in the case of The Commissioner of Income Tax-I, Kolhapur V/s. Shree Datta Sahakari Sakhar Karkhana Ltd. [Income Tax Appeal (Lod) No.1824 of 2009] decided on 6th August, 2009 has been answered against the revenue. Therefore, the question (E) cannot be entertained. 4.The appeal is disposed off accordingly with no order as to costs. (SMT. R.P.SONDURBALDOTA, J.) (J.P. DEVADHAR, J.)