Union Ltd. Mehsana - Applicant(S v. Commissioner Of Income Tax - Respondent(S

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.72 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MR.JUSTICE Z.K.SAIYED Sd/- =================================================== 1[Whether Reporters of Local Papers ]NOmay be allowed to see the judgment ?2[To be referred to the Reporter or ]NOnot ?3[Whether their Lordships wish to see ]NOthe fair copy of the judgment ?Whether this case involves a substantial question of law as to 4theinterpretationofthe NOconstitution of India, 1950 or any order made thereunder ?5[Whether it is to be circulated to ]NOthe civil judge ? =================================================== MEHSANA DIST. CO.OP.MILK PRODUCERS' UNION LTD. MEHSANA - Applicant(s) Versus COMMISSIONER OF INCOME TAX - Respondent(s) =================================================== Appearance : MR MANISH J SHAH for Applicant(s) : 1, MR MANISH R BHATT for Respondent(s) : 1, =================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 10/03/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) (1)The Income-tax Appellate Tribunal, Ahmedabad Bench 'C' has referred the following two questions under Section 256(1) of the Income-tax Act, 1961 at the instance of the assessee for Assessment Year 1988-89: 1.Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the amount transferred to Reserve Fund Account as per provisions of Sec. 67 of Gujarat Co-operative Societies Act, 1961 was not a diversion of income at source by over riding title ?the case, the Appellate Tribunal was right in law in holding that the amount transferred to Reserve Fund Account as per provisions of Sec. 67 of Gujarat Co-operative Societies Act, 1961 was not a diversion of income at source by over riding title ? 2.Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the transfer to reserve fund cannot be treated as a business expenditure and allowed deduction under Sec. 28/37 of the I.T. Act, 1961 ?the case, the Appellate Tribunal was right in law in holding that the transfer to reserve fund cannot be treated as a business expenditure and allowed deduction under Sec. 28/37 of the I.T. Act, 1961 ? (2)It is an admitted position between the parties that the issue raised by the two questions is concluded by a judgment rendered today between the same parties in I.T.R. No.65 of 1997. Hence, for the reasons stated in the judgment of even date rendered in I.T.R. No.65 of 1997, both the questions, at the instance of the assessee, are answered in the affirmative i.e. ITR/72/19973/3JUDGMENT in favour of the Revenue and against the assessee. The reference stands disposed of accordingly. There shall be no order as to costs. Sd/- [ D.A. MEHTA, J ] Bhavesh* Sd/- [Z.K. SAIYED, J ]***