The Commissioner Of Income Tax-Iv v. Shri Makai Sahakari Sakhar Karkhana

IN THE HIGH COURT OF JDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.3599 OF 2010 The Commissioner of Income Tax-IV ....Appellant.Pune Vs. Shri Makai Sahakari Sakhar Karkhana ..Respondent.Ltd., Jinti, Tal. Kamlala, Dist. Solapur. Mr. Vimal Gupta, Advocate for Appellant. Mr. Mihir Naniwadekar, Advocate for respondent. CORAM : J.P. DEVADHAR AND SMT. R.P. SONDURBALDOTA, JJ. DATE : 30TH JUNE, 2011. P.C. 1.The following questions of law are raised by the revenue in this appeal, which read thus: “A.Whether on the facts and in the circumstances of the case, the Hon ble 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 finalisation of the financial results?” B.Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT was justified in’case and in law, the Hon ble ITAT was justified in’ D. E. confirming the decision of the Hon ble Income Tax’Appellate Tribunal in holding that the provisions of Section 40A(2) are not applicable in the case 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 case of the assessee? Whether on the facts and in the circumstances of the case and in law, 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 permissible as per clause 3(1) of Sugar Control Order, 1966 of Central Government? Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT was justified in’confirming the action of CIT(A) in deleting the addition made on account of excess cane price paid to members as well as non members? Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing the sale of sugar at concessional rate to members of the society inspite of the facts that the cane prices are decided every year by the Govt. 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 Manajara 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 can not be stretched beyond the legislative intent? F.Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the payments made by the Co-op. Society were not excessive and unreasonable within the meaning of Section 40A(2) of the Act in respect to members and that to non-members within the meaning of Section 37(1) of the Act? G. Whether on the facts and in the circumstances of the case and in law, additional amount paid by the society after finalisation of the financial accounts for the year under consideration can be considered to be appropriation of net profit and price paid by the society for the procurement of the sugar cane is to be allowed as a business expenditure? ” 2.As regards questions (a) to (d) are concerned, counsel for the parties state that in view of the judgment of the Apex Court in the case of Dy. Commissioner of Income-Tax vs. Shri Satpuda Tapi Parisar SSK Limited, reported in 326 ITR page 42,(SC) the matter needs to be remanded back to the file of CIT(A) for fresh consideration. Accordingly, questions (a) to (d) are restored to file of the C.I.T. (A) for reconsideration in the light of the aforesaid decision of the Apex Court in the case of DCIT vs. Shri Satpuda (supra). 2.As regards questions (a) to (d) are concerned, counsel for the parties state that in view of the judgment of the Apex Court in the case of Dy. Commissioner of Income-Tax vs. Shri Satpuda Tapi Parisar SSK Limited, reported in 326 ITR page 42,(SC) the matter needs to be remanded back to the file of CIT(A) for fresh consideration. Accordingly, questions (a) to (d) are restored to file of the C.I.T. (A) for reconsideration in the light of the aforesaid decision of the Apex Court in the case of DCIT vs. Shri Satpuda (supra). 3.As regards question (e) is concerned, counsel for the parties state that similar question raised by the revenue has been rejected by this court in the case of Commissioner of Income-Tax vs. Kisanveer Satara Sahakari Sakhar Karkhana Ltd., in Tax Appeal No.930 of 2008, decided on 30th June 2009. For the reasons stated in the said order, question (e) cannot be entertained. 4.As regards questions (f) and (g) are concerned, counsel for the revenue does not press the said questions, as they are similar to the earlier questions. 5.The appeal is disposed off accordingly with no order as to costs. ( SMT. R.P. SONDURBALDOTA, J. ) (J.P. DEVADHAR, J.)