The Commissioner Of Income Tax v. Purna Sahakari Sakhar Karkhana Ltd

FARAD CONTINUATION SHEET NO.IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD.APPELLATE SIDE JURISDICTION OfficeNotes,Office Court's or Judge's orders.MemorandaofCoram, appearance,Court's orders or directions and Registrar's orders. 14 TAX APPEAL NO. 55 OF 2009 THE COMMISSIONER OF INCOME TAX VERSUS PURNA SAHAKARI SAKHAR KARKHANA LTD ... Advocate for Appellant : Mr. Sharma Alok M. Advocate for Respondent: Mr. Sharma R.M. *** CORAM:S.C.DHARMADHIKARI & RAVINDRA V.GHUGE,JJ.DATED: 3rd FEBRUARY, 2014. PER COURT: 1.Heard both the sides. 2.Perused the orders passed by the Income Tax Appellate Tribunal, Pune Bench dated 30th December, 2008 and that of the Commissioner of Income Tax (Appeals) dated 23rd May, 2008. 3.Upon perusal thereof and the relevant statutory provisions we are of the opinion that this appeal raises substantial questions of law. It deserves admission on the said substantial questions of law: "(I) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the price actually paid by the cooperative society for the procurement of the sugar cane is to be allowed as business expenditure? (II) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the excess amount of expenditure on sugar cane purchase price was a charge on profit i.e. diversion of profit and not appropriation of profit? (III)Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition made by the Assessing Officer in respect of the contribution made by the assessee for the Vasant Dada Sugar Institute, whereas there are facts on record that: (i)the amount paid by the assessee is in the nature of the contribution/ donation and the same can be allowed under section 35 (1) of the IT Act when it is actually paid; (ii) the amount paid by the assessee is not the liability of the assessee, as there are no evidences on record to this effect; and (iii)even if for the sake of argument, it is considered that this is the liability of the assessee the assessee has not produced any evidence to establish that this liability has actually been incurred/ paid by the assessee?" 4.After having heard both counsel at some length, we are of the opinion that this tax appeal need not be kept pending. The reason for the same is obvious. In relation to several sugar factories in this region and across the State, identical controversy was raised in relation to contributions made to the institutions, whether those are in the nature of contribution for scientific research or not and whether the orders passed by the authorities indicate the same with sufficient details and clarity are matters which were involved in Tax Appeal No.56 of 2011 and other appeals. Upon examining the orders there, and equally that of the Honourable Supreme Court in SLP (C) No.8590 of 2010 [C.I.T., Bombay V/s Krishna Sahakari Sakhar Karkhana Ltd.) and connected matters on the applicability of section 40A(2)(a) of the Income Tax Act, 1961 we have adopted the course laid down in the Supreme Court order i.e. of remand. In such circumstances and following the same order, we quash and set aside the orders of the Tribunal and that of the Commissioner of Income Tax (Appeals) impugned in this appeal. We remit the case to the Commissioner of Income Tax (Appeals), Aurangabad for being decided afresh, on merits and in accordance with law but circumstances and following the same order, we quash and set aside the orders of the Tribunal and that of the Commissioner of Income Tax (Appeals) impugned in this appeal. We remit the case to the Commissioner of Income Tax (Appeals), Aurangabad for being decided afresh, on merits and in accordance with law but bearing in mind the issue of facts and law noted by us above. We had to pass an order of remand only because there are orders impugned in this appeal, which are cryptic in nature, we could not satisfy ourselves as to whether the Appellate Tribunal has performed its duty in accordance with law. In such circumstances, this appeal is also allowed and we adopt the reasoning in Tax Appeal No.33 of 2009 in allowing the same. There will be no order as to costs. [RAVINDRA V. GHUGE,J.][S.C.DHARMADHIKARI,J.]Dt.03/02/2014ans/55