The Principal Commissioner Of Income Tax-Ii, Amritsar v. M/S The Gurdaspur Co-Operative Sugar Mills Ltd. Paniar, Gurdaspur

ITA No. 213 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 213 of 2015 Date of Decision: 11.12.2015 The Principal Commissioner of Income Tax-II, Amritsar ....Appellant. Versus M/s The Gurdaspur Co-operative Sugar Mills Ltd. Paniar, Gurdaspur ...Respondent. 1.Whether the Reporters of the local papers may be allowed to see the judgment?the judgment? 2.To be referred to the Reporters or not?3.Whether the judgment should be reported in the Digest?3.Whether the judgment should be reported in the Digest? CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Denesh Goyal, Advocate for the appellant. Mr. M.R. Sharma, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This order shall dispose of three appeals bearing ITA Nos.213 of 2015, 210 and 302 of 2012 as learned counsel for the parties arenot at variance that all the appeals can be decided together and identicalquestions of law and facts are involved therein. For brevity, the facts arebeing extracted from ITA No. 213 of 2015. 2.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 22.12.2014 (Annexure A-3) passed by the Income TaxAppellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as“the Tribunal”) in ITA No. 55/ASR/2014 for the assessment year 2007-08,claiming the following substantial questions of law:- i)Whether in the facts and circumstances of thecase the Hon'ble ITAT has erred in deletingaddition of Rs.44,55,335/- by holding that saleof scrap generated from the main businesspartakes the character of the same income andis eligible for claim of deduction u/s. 80P(2)(a)(iii) of the Income Tax Act, 1961?case the Hon'ble ITAT has erred in deletingaddition of Rs.44,55,335/- by holding that saleof scrap generated from the main businesspartakes the character of the same income andis eligible for claim of deduction u/s. 80P(2)(a)(iii) of the Income Tax Act, 1961? ii)Whether in the facts and in the circumstancesof the case and in law, the Hon'ble ITAT wasright in allowing deduction u/s 80P(2)(a)(iii) ofthe I.T. Act, 1961 for the assessment year 2007-08 by respectfully following the judgment in thecase of Budhewal Coop Sugar Mills vs. CIT(P&H)(FB) reported at (2009) 315 ITR 351,whereas on the same issue, the appeal filed bythe Revenue u/s 260A is still pending before theHon'ble Punjab & Haryana High Court?of the case and in law, the Hon'ble ITAT wasright in allowing deduction u/s 80P(2)(a)(iii) ofthe I.T. Act, 1961 for the assessment year 2007-08 by respectfully following the judgment in thecase of Budhewal Coop Sugar Mills vs. CIT(P&H)(FB) reported at (2009) 315 ITR 351,whereas on the same issue, the appeal filed bythe Revenue u/s 260A is still pending before theHon'ble Punjab & Haryana High Court? 3.A few facts necessary for adjudication of the instant appealas narrated therein may be noticed. The assessee filed its return on31.10.2007 for the assessment year 2007-08 in the status ofCooperative Society (AOP) declaring loss at ` 5,20,19,492/- plusagriculture income of ` 5,62,677/- and had claimed carry forward losses 3.A few facts necessary for adjudication of the instant appealas narrated therein may be noticed. The assessee filed its return on31.10.2007 for the assessment year 2007-08 in the status ofCooperative Society (AOP) declaring loss at ` 5,20,19,492/- plusagriculture income of ` 5,62,677/- and had claimed carry forward losses of earlier year amounting to ` 19,33,40,880/-. The said return wasprocessed on 24.3.2008 under Section 143(1) of the Act. The AssessingOfficer framed the assessment vide order dated 4.12.2009 (Annexure A-1) under Section 143(3) of the Act making an addition of ` 44,55,335/-on account of scrap lying with the assessee at the end of financial year.Feeling aggrieved, the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [for brevity “the CIT(A)”]. TheCIT(A) vide order dated 14.11.2013 (Annexure A-2) allowed the appealand deleted the addition of ` 44,55,335/- on account of scrap. Againstthe order, Annexure A-2, the revenue filed an appeal before the Tribunal.The Tribunal vide order dated 22.12.2014 (Annexure A-3) affirmed theorder of the CIT(A) and dismissed the appeal. Hence, the presentappeals by the revenue. 4.We have heard learned counsel for the parties. 5.The Tribunal on the basis of Full Bench judgment of thisCourt inThe Budhewal Co-operative Sugar Mills Ltd. v.Commissioner of Income Tax (2009) 315 ITR 351 (P&H)(FB) haddecided the issue in favour of the assessee. It was submitted by thelearned counsel for the appellant that the revenue had filed an appealagainst the said judgment before the Apex Court titled DeputyCommissioner of Income Tax v. Budhewal Co-operative Sugar MillsLtd. (2015) 373 ITR 35 (SC) wherein following its earlier judgment inMorinda Co-operative Sugar Mills Ltd. v. Commissioner of IncomeTax (2013) 354 ITR 230 (SC), the Apex Court had remanded the matterback for adjudicating the issue afresh. On the aforesaid premises, it wasprayed that these appeals be referred back to the Tribunal for fresh decision in accordance therewith. 6.In view of the above, the matter is remitted to the Tribunal todecide the issue afresh in accordance with law after affording anopportunity of hearing to the parties. 7.The appeals stand disposed of accordingly. (AJAY KUMAR MITTAL)JUDGE December 11, 2015(RAMENDRA JAIN)gbsJUDGE