The Commissioner Of Income Tax - I, Pune v. Bhima Sahakari Sakhar Karkhana Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5203 OF 2010 The Commissioner of Income Tax - I, Pune..Appellant. Versus Bhima Sahakari Sakhar Karkhana Limited ..Respondent. Mr.Vimal Gupta for the appellant.Mr.S.N. Inamdar for the respondent. CORAM : J.P. Devadhar & A.A. Sayed, JJ. P.C. : DATE : 25[th] July, 2011. 1.Four questions of law have been raised by the Revenue in this appeal. A)Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in holding that the disallowance made by the Assessing Officer of excess cane price paid to members and non members was not justified and in holding that such payments could not be justified and in holding that such payments could not be disallowed either u/s. 40A(2) or u/s.37(1) of the Income-tax Act, 1961 ?law, the ITAT was correct in holding that the disallowance made by the Assessing Officer of excess cane price paid to members and non members was not justified and in holding that such payments could not be justified and in holding that such payments could not be disallowed either u/s. 40A(2) or u/s.37(1) of the Income-tax Act, 1961 ? B)Whether the differential payment made by the assessee to the cane growers after the close of the financial year or after the balance sheet would constitute an expenditure under Section 37 of the Income Tax Act, 1961 ?cane growers after the close of the financial year or after the balance sheet would constitute an expenditure under Section 37 of the Income Tax Act, 1961 ? C)Whether such differential payment would, applying the real income theory, constitute an expenditure or distribution of profits ?income theory, constitute an expenditure or distribution of profits ? D)a)Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in deleting the addition made by the Assessing Officer on account of difference between the market price of sugar and concessional price at which sugar was sold to the cane growers by holding that no income accrued to the assessee on concessional sales and, therefore, the assessee was not liable to be assessed on the difference ? b)Whether the ITAT did not err on facts and in law in not treating such difference as constituting distribution of profits ? 2.As regard questions A to C are concerned, counsel for the parties state that in the light of Apex Court judgment in the case of DCIT V/s. Shri Satpuda Tapi Parisar SSK Ltd. reported in (2010) 326 ITR 42 (SC), the matter be restored to the file of the Commissioner of Income Tax (Appeals) for fresh consideration in accordance with law. In this view of the matter, question Nos.A to C are restored to the file of the Assessing Officer for fresh decision in the light of the Apex Court decision in the case of Satpuda Tapi Parisar SSK Limited (Supra). 3.In so far as question D is concerned, counsel for the parties state that the said question is answered in favour of the assessee by the decision of this Court in the case of CIT V/s. Kisanveer Satara SSK Limited, being Income Tax Appeal No.930 of 2008 decided on 30th June 2009. In this view of the matter, question D cannot be entertained. 4.The appeal is accordingly disposed off with no order as to costs.