The Commissioner Of Income-Tax, Karnal v. Karnal Cooperative Sugar Mills Ltd

Income-tax Appeal No.707 of 2010 -1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No.707of 2010 Date of decision: 17.12.2010 The Commissioner of Income-Tax, Karnal ...Appellant Versus Karnal Cooperative Sugar Mills Ltd. ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Yogesh Putney, Advocate for the appellant. **** ADARSH KUMAR GOEL, J ( Oral). 1.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 against order dated9.10.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench(D), Delhi in ITA No.1866/Del/2002, for the assessment year 1999-2000, proposing following substantial questions of law:- “a).Whether on the facts and circumstances of thecase, the ITAT was justified in holding thatmanufacturing of sugar from sugarcane is marketingof agricultural produce grown by members ofassessee society and the assessee society iseligible for deduction u/s 80P(2) (a) (iii) of theI.T.Act, 1961 despite the fact that (a) manufactureof sugar from sugarcane resulted in the emergenceof totally new substance, which is a commercial produce and (b) in the manufacturing process, infact, the assessee incurred all the expenditure onits own and marketed the sugar in its own nameand as such it cannot be said that the sugar in itsown name and as such it cannot be said that thesugar which was sold by the assessee belonged toits members? b)Whether on the facts and in the circumstances ofthe case, the ld. ITAT was right in departing from itsown decision in this case i.e. identical case of theKarnal Cooperative Sugar Mills ltd. (253 ITR 659)solely on the basis of the fact that the earlierjudgment had wrongly based itself on the criteriacontained in 80P(2)(a)(v) i.e. processing agricultureproduce with the aid of power, despite the fact thatreference to this provision was merely an obiterdicta in the earlier judgment and not part of the maincriteria on which the judgment had been given infavour of the revenue?”.the case, the ld. ITAT was right in departing from itsown decision in this case i.e. identical case of theKarnal Cooperative Sugar Mills ltd. (253 ITR 659)solely on the basis of the fact that the earlierjudgment had wrongly based itself on the criteriacontained in 80P(2)(a)(v) i.e. processing agricultureproduce with the aid of power, despite the fact thatreference to this provision was merely an obiterdicta in the earlier judgment and not part of the maincriteria on which the judgment had been given infavour of the revenue?”. 2.It is not disputed that issues raised in the appeal arecovered by judgment of Full Bench of this Court inBudhewal Co-op. Sugar Mills Limited Vs. Commissioner of Income-Tax[2009] 315ITR 351 which has been followed by the Tribunal. 3.Accordingly, this appeal is disposed of in same terms. (Adarsh Kumar Goel) Judge December 17,2010Pka (Ajay Kumar Mittal) Judge