Shriram Sahakari Sakhar Karkhana Ltd., Satara V. Dy. CIT, Satara Circle, Satara

ITA 1143/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1967 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Business income; Depreciation; Application of stay; Additional evidence; Difference of opinion; Condonation of delay; Unabsorbed depreciation
• Section: 43B; 143(3); 72(1); 56; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , A M . / ITA NO. 1143 /PN/201 3 / ASSESSMENT YEAR : 20 0 8 - 0 9 SHRIRAM SAHAKARI SAKHAR KARKHANA LTD., PHALTAN 415523, DIST. SATARA . / APPELLANT PAN: A AAAS1006K VS. THE DY. COMMISSIONER OF INCOME TAX , SATARA CIRCLE, SATARA . / RESPONDENT . /SA NO . 1 00 /PN/201 5 ARISING OUT OF ITA NO.1143/PN/2013 / ASSESSMENT YEAR : 2008 - 09 SHRIRAM SAHAKARI SAKHAR KARKHANA LTD., PHALTAN 415523, DIST. SATARA . APP LICANT PAN: AAAAS1 006K VS. THE DY. COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA . RESPONDENT / APPELLANT BY : SHRI KISHORE PHADKE / RESPONDENT BY : SHRI S.K . RASTOGI, CIT / DATE OF HEARING : 2 3 . 0 2 .201 6 / DATE OF PRONOUNCEMENT: 25 . 0 4 .201 6 ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 2 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - II I , PUNE , DATED 29 . 0 2 .20 1 2 RELATING TO ASSESSMENT YEAR 20 0 8 - 0 9 AGAINST ORDER PASSED UNDE R SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING MODIFIED GROUNDS OF APPEAL: - 1. THE LEARNED CIT(APPEALS) - III, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS . 4,09,07,856/ - TO THE TOTAL INCOME OF THE APPELLANT. 2. THE LEARNED CIT(APPEALS) - III, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE ORDER OF THE AO TREATING THE INCOME FROM LEASE RENT AMOUNTING TO RS.3,06,63,400/ - RECEIVED FROM M / S SHRIRAM JAWAHAR SHETAKARI SAHAKARI SAKHA R UDYOG AS AN INCOME TAXABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' INSTEAD OF THE HEAD 'INCOME FROM BUSINESS AND PROFESSION'. 3. THE LEARNED CIT(APPEALS) - III, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE ORDER OF THE AO TREATING THE INCOME FROM LEASE RENT CONFIRMING THE ORDER OF THE AO TREATING THE INCOME FROM LEASE RENT AMOUNTING TO RS.1,19,10,041 / - RECEIVED FROM M / S DECCAN BOTTLING & DISTILLING INDUSTRIES LTD. AS AN INCOME TAXABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' INSTEAD OF THE HEAD 'INCOME FROM BUSINESS AND PROFESSION'. 4. ALTERNATIVELY & WITHOUT PREJUDICE TO GROUND NO. 2, THE LEARNED CIT(A) AND LEARNED AO ERRED IN LAW AND ON FACTS IN NOT TREATING THE INCOME FROM LEASE RENT (COMPENSATION) AMOUNTING TO RS.3,06,63,400/ - RECEIVED FROM M / S SHRIRAM JAWAHAR SHETAKARI SAHAKARI SAKHAR UDYOG AS BUSINESS INC OME FOR THE PURPOSE OF SECTION 72(1) OF THE ITA, 1961, THOUGH TAXED BY THE LEARNED AO UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. 5. ALTERNATIVELY & WITHOUT PREJUDICE TO GROUND NO. 3, THE LEARNED CIT(A) AND LEARNED AO ERRED IN LAW AND ON FACTS IN NOT TRE ATING THE INCOME FROM LEASE RENT AMOUNTING TO RS.1,19,10,041/ - RECEIVED FROM M / S DECCAN BOTTLING & DISTILLING INDUSTRIES LTD. AS BUSINESS INCOME FOR THE PURPOSE OF SECTION 72(1) OF THE ITA, 1961, THOUGH TAXED BY THE LEARNED AO UNDER THE HEAD 'INCOME FROM O THER SOURCES'. 6. THE LEARNED CIT(APPEALS) - I II, PUNE ERRED IN LAW AND ON FACTS IN DENYING THE SET - OFF OF UNABSORBED DEPRECIATION OF RS.3,49,42,553/ - OF THE FOLLOWING YEARS TO THE APPELLANT A.Y. 1999 - 2000 - RS.2,38,41,543/ - A.Y. 2000 - 2001 - RS. 5 4,21,893/ - A.Y. 2002 - 2003 - RS. 58,79,117/ - ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 3 7. THE LEARNED CIT(APPEALS) - I II, PUNE ERRED IN LAW AND ON FACTS IN DENYING THE APPELLANT TO PRODUCE THE ADDITIONAL EVIDENCES RELATING TO GENUINE PARTNERSHIP WITH M/S. JAWAHAR SSK LIMITED ON RECORD. 8. THE LEARNED CIT(APPEALS) - I II, PUNE ERRED IN LAW AND ON FACTS IN CHARACTERIZING THE GENUINE PARTNERSHIP DEED OF THE APPELLANT AS A SHAM DOCUMENT AND A COLOURABLE DEVICE. 9. WITHOUT PREJUDICE TO GROUND NO.2, THE LEARNED CIT(APPEALS) - III, PUNE ERRED IN LAW AND ON FACTS IN DISALLOWING RS.12,30,068/ - U/S 43B OF IT ACT WITHOUT APPRECIATING THE FACT THAT PROVISIONS OF SECTION 43B ARE NOT APPLICABLE IN CASE OF INCOME FROM OTHER SOURCES. 10. THE APPELLANT CRAVES LEAVE TO ADD / MODIFY / ALTER / DELETE ALL / ANY OF T HE GROUNDS OF APPEAL. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE TREATMENT OF LEASE RENT RECEIVED BY THE ASSESSEE FROM TWO DIFFERENT CONCERNS I.E. SUM OF RS.3,06,63,400/ - FROM M/S. SHRIRAM JAWAHAR SHETAKARI SAHAKARI SAKHAR UDYOG AND RS. 1,19,10,041/ - FROM M/S. DECCAN BOTTLING & DISTILLING INDUSTRIES LTD. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS A CO - OPERATIVE SOCIETY CARRYING ON THE ACTIVITY OF MANUFACTURE AND SALE OF WHITE SUGAR. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT RS.NIL. THE ASSESSEE HAD LEASED OUT ITS SUGAR FACTORY TO M/S. SHRIRAM JAWAHAR SHETKARI SAHAKARI SAKHAR UDYOG AND FOR THE YEAR UNDER CONSIDERATION HAD RECEIVED LEASE RENT OF RS.3,06,63,400/ - . FURTHER, THE ASSESSEE HAD ALSO RECEIVED SUM OF RS. 1,19,10,041/ - AS LEASE RENT FROM DISTILLERY DIVISION. THE ASSESSEE HAD DECLARED THE SAID RECEIPTS UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDIN GS NOTED THAT THERE WAS NO MANUFACTURING ACTIVITY DURING THE ENTIRE FINANCIAL YEAR AND THE ASSESSEE HAD DECLARED THE INCOME FROM LEASE RENT AS INCOME FROM BUSINESS. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID LEASE RENT IS TO BE ASSESSE D AS INCOME FROM OTHER SOURCES AND DEPRECIATION CLAIMED BY THE ASSESSEE WAS ALLOWED TO THE EXTENT OF LEASE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 4 RENT INCOME AS PROVIDED UNDER SECTION 57(II) OF THE ACT. THE ASSESSING OFFICER THUS, ALLOWED DEPRECIATION OF RS. 33,81,649/ - ON THE SUGAR FACTORY P LANT AND RS. 22,93,610/ - ON DISTILLERY PLANT AND THE BALANCE AMOUNT WAS TREA TED AS INCOME FROM OTHER SOURCES. THE ASSESSEE HAD FURTHER DECLARED INCOME FROM CAPITAL GAINS AT RS.4.62 CRORES AND AFTER SETTING OFF OF THE BROUGHT FORWARD LOSSES OF RS. 10,08,91 ,625/ - , THE TOTAL INCOME WAS COMPUTED AT RS.NIL. THE ASSESSING OFFICER DENIED THE SET OFF OF BROUGHT FORWARD LOSSES TO THE EXTENT OF RS.4.62 CRORES AGAINST THE INCOME FROM CAPITAL GAINS AS THE SAME WAS NOT ALLOWABLE AS PER PROVISIONS OF SECTION 72 OF THE ACT. FURTHER, SINCE THE INCOME WAS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES , NO SET OFF OF BROUGHT FORWARD LOSSES WERE ALLOWED. AGAINST THE SAME, ONLY TO THE EXTENT OF BUSINESS INCOME DECLARED BY THE ASSESSEE ON SALE OF OLD STOCK OF SUGAR TO T HE EXTENT , SUM OF RS.54,80,993/ - WAS ALLOWED TO BE SET OFF. 5. BEFORE THE CIT(A), THE CLAIM OF ASSESSEE WAS TWO - FOLD THAT FIRST THE LEASE INCOME RECEIVED BY THE ASSESSEE IS TO BE ASSESSED AS INCOME FROM BUSINESS SINCE IT WAS ENGAGED IN THE BUSINESS OF MAN UFACTURING OF CRYSTALLIZED SUGAR IN PARTNERSHIP WITH ANOTHER SUGAR FACTORY NAMELY JAWAHAR SHETKARI SAHAKARI SAKRKHANA LTD. THE SAID PARTNERSHIP DEED WAS ENTERED ON 09.10.2006 AND WAS VALID FOR PERIOD OF 15 YEARS. AS PER THE TERMS OF PARTNERSHIP DEED, THE PROFIT OF PARTNERSHIP FIRM WAS TO BE EARNED BY JAWAHAR SSK AND THE ASSESSEE WAS TO BE GIVEN COMPENSATION OF RS.100/ - PER MT OF CANE CRUSHED FOR THE FIRST FIVE YEARS STARTING FROM THE YEAR 2006 - 07 TO 2010 - 11, RS.110/ - FROM 2011 - 12 TO 2015 - 16 AND RS.120/ - F OR THE REST OF FIVE YEARS. BESIDES, THE DISTILLERY UNIT OWNED BY THE ASSESSEE WAS GIVEN ON LEASE TO DECCAN BOTTLING & DISTILLING INDUSTRIES LTD. ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 5 6. THE SECOND ISSUE RAISED BY THE ASSESSEE WAS THE CLAIM OF SET OFF OF BROUGHT FORWARD DEPRECIATION AND IT WAS POINTED OUT THAT IN VIEW OF THE PROVISIONS OF SECTION 32(2) OF THE ACT, BROUGHT FORWARD DEPRECIATION WAS TO BE TREATED AS PART OF CURRENT DEPRECIATION AND ALONG WITH CURRENT DEPRECIATION, THE SAME WAS FIRST TO BE ADJUSTED AGAINST THE BUSINESS INCOME OF RELEVANT YEAR AND IN CASE AMOUNT REMAINS UNABSORBED, THEN THE SAME IS TO BE SET OFF AGAINST INCOME FROM ANY OTHER HEAD OF INCOME. IF FURTHER, THERE IS CERTAIN UNABSORBED PORTION, THE SAME WAS TO BE CARRIED FORWARD WITHOUT ANY TIME LIMIT. FURTHER, RELIAN CE WAS PLACED O N THE RATIO LAID DOWN IN CIT VS. VIRMANI INDUSTRIES PVT. LTD. (1995) 216 ITR 607 (SC) FOR THE PROPOSITION THAT FOR AVAILING THE BENEFIT OF SECTION 32(2) OF THE ACT, IT WAS NOT NECESSARY THAT THE SAME BUSINESS SHOULD BE CARRIED ON IN THE FOLL OWING PREVIOUS YEAR NOR IT WAS NECESSARY THAT THE ASSET WHICH EARNED DEPRECIATION IN THE PRECEDING YEAR SHOULD EXIST AND CONTINUE TO BE USED IN THE BUSINESS IN THE FOLLOWING YEAR NOR THAT THE ASSESSEE SHOULD CARRY ON ANY BUSINESS OR PROFESSION IN THE FOLLO WING YEAR. THE ASSESSEE CLAIMED THAT IT HAD BROUGHT FORWARD DEPRECIATION LOSS AMOUNTING TO RS.8,49,07,570/ - AND THE SAME HAD TO BE TREATED AS DEPRECIATION FOR THE YEAR UNDER CONSIDERATION, IN VIEW OF THE PROVISIONS OF SECTION 32(2) OF THE ACT. AS PER THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE SET OFF OF DEPRECIATION LOSS AMOUNTING TO RS.4,62,05,300/ - AGAINST THE INCOME FROM CAPITAL GAINS WAS TO BE ALLOWED. THE ASSESSEE FURTHER STRESSED THAT IT HAD NOT LEASED OUT ANY OF ITS ASSETS TO THE NEW PARTNERSHIP FIRM NAMELY SHRIRAM JAWAHAR SHETKARI SAHAKARI SAHKAR UDYOG M WHEREIN THE ASSESSEE WAS A PARTNER. THOUGH, IT WAS ONLY BEING GIVEN COMPENSATION FOR INTRODUCING THE USAGE OF SUGAR PLANT AS CAPITAL IN KIND IN THE PA RTNERSHIP FIRM . THE NATURE O F COMPENSATION WAS ON ACCOUNT OF CAPITAL EMPLOYED BY THE ASSESSEE IN THE PARTNERSHIP FIRM AND WHERE THE ASSETS HAD BEEN PUT TO USE BY THE ASSESSEE FOR BUSINESS , THE AMOUNT RECEIVED FROM ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 6 SUCH ARRANGEMENT BY WAY OF COMPENSATION WAS TO BE ASSESSED UNDER SECTI ON 28 OF THE ACT AND NOT UNDER SECTION 56 OF THE ACT. IN RESPECT OF DISTILLERY UNIT, IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT IT CONSTITUTED BUSINESS INCOME AS THE ASSESSEE WAS CARRYING THE BUSINESS OF LEASING DIST ILLERY DIVISION AS A WHOLE. 7. THE CIT(A) VIDE PARA 6.1 NOTED THAT THE ASSESSEES CLAIM OF HAVING ENTERED INTO PARTNERSHIP WITH JAWAHAR SHETKARI SAHAKARI SAKRKHANA LTD. ON 09.10.2006 WAS NOT BROUGHT TO THE NOTICE OF ASSESSING OFFICER AND THE ASSESSEE HAD FILED THE COPY OF PARTNERSHIP DEED DATED 09.10.2006 WITH A REQUEST TO ADMIT THE SAME AS ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962. THE CIT(A) WAS OF THE VIEW THAT WHERE THE ASSESSMENT PROCEEDINGS WERE IN PROGRESS FOR MORE THAN A YEA R AND WHERE THE ASSESSMENT ORDER WAS PASSED AFTER GIVING ADEQUATE OPPORTUNITY FOR ADDUCING THE EVIDENCE BEFORE THE ASSESSING OFFICER, AND WHERE THE ASSESSEE HAS FAILED TO BRING ON RECORD ANY EVIDENCE TO SHOW THAT THE PARTNERSHIP EXISTED AT THE TIME OF ASSE SSMENT PROCEEDINGS AND PRODUCTION OF THE SAME BEFORE THE ASSESSING OFFICER WAS PREVENTED BY CIRCUMSTANCES BEYOND ITS CONTROL, THEN IN SUCH CIRCUMSTANCES, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE COULD NOT BE ADMITTED. HOWEVER, VIDE PARA 6.3 ONWARDS, THE CIT(A) IN THE INTEREST OF JUSTICE AND FAIR PLAY, NOTED THAT THE CLAUSES OF PARTNERSHIP DEED FILED BY THE ASSESSEE AS ADDITIONAL EVIDENCE. THE CIT(A) VIDE PARA 6.4 OBSERVED THAT THE ASSESSEE HAD OFFERED ITS SUGAR PLANT FOR USAGE AS CAPITAL CONTRIBUTION IN KIND TO THE PARTNERSHIP FOR PERIOD OF 15 YEARS, IN LIEU OF WHICH, CERTAIN COMPENSATION WAS PAID TO THE ASSESSEE. THE CIT(A) OBSERVED THAT TO CONSTITUTE A VALID PARTNERSHIP WITHIN THE DEFINITION OF PARTNERSHIP UNDER SECTION 4 OF THE PARTNERSHIP ACT, TW O ESSENTIAL CONDITIONS WERE TO BE SATISFIED (I) THAT THERE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 7 SHOULD BE AN AGREEMENT TO SHARE THE PROFITS AS WELL AS LOSSES OF BUSINESS AND (II) THE BUSINESS MUST BE CARRIED ON BY ALL OR ANY OF THEM ACTING FOR ALL. HOWEVER, IN THE PRESENT CASE BEFORE THE CI T(A), THE OTHER PARTNER I.E. JAWAHAR WAS ENTITLED TO A LL THE PROFITS/LOSS OF THE PARTNERSHIP FIRM AND THE ASSESSEE WAS ONLY ENTITLED TO COMPENSATION AT A FIXED RATE, WHICH AS PER THE CIT(A), WAS AGAINST THE BASIC PRINCIPLES OF PARTNERSHIP. FURTHER, THE SH ARE OF EACH PARTNER IN PROFIT S / LOSS ES OF THE PARTNERSHIP WERE NOT SPECIFIED IN THE PARTNERSHIP DEED AND FURTHER, THE ASSESSEE WAS IMMUNE FROM L OSSES INCURRED BY THE PARTNERSHIP FIRM. IN THIS VIEW, THE CIT(A) OBSERVED THAT IT COULD NOT BE INFERRED THAT T HE ASSESSEE WAS IN FACT INTRODUCED AS A PARTNER AND THERE WAS A VALID PARTNERSHIP. IN SUCH SITUATION, THE CONTENTION OF ASSESSEE THAT IT WAS ENGAGED IN THE BUSINESS OF MANUFACTURE OF CRYSTALLIZED SUGAR IN PARTNERSHIP WITH ANOTHER SUGAR FACTORY, WAS NOT AC CEPTED BY THE CIT(A). REFERENCE WAS MADE TO THE RATIO LAID DOWN BY THE APEX COURT IN CIT VS. DURGA PRASAD MORE REPORTED IN 82 ITR 540 (SC) AND IT WAS OBSERVED THAT THE HONBLE APEX COURT HAD LAID DOWN THAT TAXING AUTHORITIES ARE NOT REQUIRED TO PUT ON BLI NKERS WHILE LOOKING AT THE DOCUMENTS BEFORE THEM AND WHERE THERE WERE REASONS TO BELIEVE THAT APPARENT WAS NOT REAL, IT WAS OPEN TO THE ASSESSING OFFICER TO LOOK INTO SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF RECITALS MADE IN THE DOCUMENTS. THE REFORE, MERELY BECAUSE THE DOCUMENT IN QUESTION WAS ONE OF PARTNERSHIP, THE CIT(A) HELD THAT IT WAS OPEN TO THE ASSESSING OFFICER TO LOOK INTO SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF RECITALS MADE IN THE AGREEMENT. ANOTHER ASPECT NOTED BY THE CIT(A) WAS THAT THE FIXED COMPENSATION OF RS.100/ - PER MT RECEIVED BY THE ASSESSEE FROM JAWAHAR WAS SHOWN AS LEASE RENT IN THE TDS CERTIFICATE ISSUED BY JAWAHAR. THE RENT WAS PAID TO THE ASSESSEE AS CONTEMPLATED IN SECTION 194I OF THE ACT AND THE CIT(A) HAS SCANNED AND REPRODUCED THE COPY OF FORM 26AS IN THIS REGARD AT PAGE 12 OF THE APPELLATE ORDER. THE CIT(A) ALSO NOTED THAT IN ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 8 THE IMMEDIATE PRECEDING YEAR ALSO, THE SAID LEASE RENT WAS DECLARED IN FORM 26AS AND TAX WAS DEDUCTED UNDER SECTION 194I OF TH E ACT. THE CIT(A) THUS, HELD THAT THE ASSESSEE HAD RECEIVED FIXED COMPENSATION AND NOTHING MORE OUT OF PROFITS OF PARTNERSHIP FIRM AND OTHER CLAUSES IN THE SAID DEED PROVIDED IMMUNITY TO THE ASSESSEE FROM LOSSES OF THE PARTNERSHIP, CLEARLY INDICATES THAT THE RELATIONSHIP BETWEEN THE ASSESSEE AND JAWAHAR WAS THAT OF LESSOR AND LESSEE AND NOT OF PARTNERSHIP. FURTHER, IF IT IS THE CASE OF INCOME FROM PARTNERSHIP AS CLAIMED BY THE ASSESSEE, THERE WAS NO NECESSITY FOR JAWAHAR TO DEDUCT TAX AT SOURCE UNDER SECT ION 194I OF THE ACT. THE CIT(A) WAS OF THE VIEW THAT THE CLAUSES IN PARTNERSHIP DEED CLEARLY SHOW THAT THE ALLEGED PARTNERSHIP WITH JAWAHAR WAS ONLY SHAM AND COLOURABLE DEVICE AND SOLE INTENTION WAS TO CLAIM SET OFF OF BROUGHT FORWARD BUSINESS LOSSES AGAI NST THE LEASE RENTAL INCOME BY TREATING THE SAME AS INCOME FROM BUSINESS. HENCE, THE CLAIM OF THE ASSESSEE WAS DENIED ON ALL COUNTS. 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE MADE A PRAYER FOR CONDONATION OF DELAY IN FILING THE PRESENT APPEAL LATE BY 90 DAYS. OUR ATTENTION WAS DRAWN TO THE APPLICATION FILED IN THIS REGARD, WHEREIN IT WAS POINTED OUT THAT EARLIER THE CASE OF THE ASSESSEE WAS BEING LOOKED AFTER BY M/S. MOHAN D E SHMUK H & CO. HOWEVER, THE ASSESSMENTS AND APPEAL OF THE ASSESSEE WERE LOOKED AFTER BY M/S. ANRK & ASSOCIATES LLP . ON 16.01.2013 , THE ASSESSEE RECEIVED A LETTER GIVING EFFECT TO THE APPELLATE ORDER PASSED BY THE CIT(A) - III, PUNE AND IT WAS REALIZED THAT THE APP ELLATE ORDER WAS NOT RECEIVED BY THE ASSESSEE S OCIETY. THEREAFTER, THE ASSESSEE MADE AN APPLICATION FOR ISSUE OF APPELLATE ORDER. THEREAFTER, IT WAS LEARNT THAT THE CIT(A)S ORDER WAS ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 9 COLLECTED BY THE EARLIER CA FIRM REPRESENTATIVES BY HAND ON 09.08.2012 . HOWEVER, IT TRANSPIRED THAT THE SAME WAS MISPLACED DURING THE COURSE OF FORMATION OF M/S. ANRK & ASSOCIATES LLP. THE ASSESSEE IN THE FIRST PLACE COUNTED THE PERIOD OF DELAY OF 90 DAYS ON THE BASIS OF RECEIPT OF SAID COPY. HOWEVER, LATER IT REALIZED TH AT THE APPLICATION HAD TO BE MADE FROM THE DATE OF RECEIPT BY THE EARLIER COUNSEL RESULTING IN DELAY OF 226 DAYS. THE ASSESSEE MADE A REQUEST FOR CONDONATION OF DELAY IN FILING THE PRESENT APPEAL LATE AS THE DELAY WAS ATTRIBUTABLE TO CONFUSION IN HANDING OVER OF PAPERS / FILES BETWEEN EARLIER CA FIRM AND THE PRESENT CA FIRM. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION ALONG WITH AN AFFIDAVIT WHICH IS AVAILABLE ON RECORD. IN THE ENTIRETY OF THE ABO VE SAID FACTS AND CIRCUMSTANCES AND BECAUSE OF C ONFUSION IN HANDING OVER OF THE DOCUMENTS FROM ONE CA TO ANOTHER, WE FIND MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD AND THE DELAY IN FILING THE PRESENT APPEAL BEFORE THE TRIBUNAL IS CONDONED. WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING BO TH THE LEARNED AUTHORIZED REPRESENTATIVES. 10. IN RESPECT OF MERITS OF THE CASE, T HE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IN THE CASE IS IN RELATION TO ASSESSABILITY OF INCOME IN THE HANDS OF ASSESSEE. IT WAS PO INTED OUT BY HIM THAT AS PER SECTION 20 OF MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, THE PARTNERSHIP WAS ENTERED INTO BETWEEN THE ASSESSEE AND JAWAHAR . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT THE SAID PARTNERSHIP DEED WAS NOT FILED BEFORE THE ASSESSING OFFICER. HOWEVER, THE SAME WAS FILED BEFORE THE CIT(A) , WHO FIRST VIDE PARA 6.2 STATED THAT THE SAME IS NOT TO BE ADMITTED BUT IN THE LATER PARAS, ADMITTED THE SAID PARTNERSHIP DEED AND CONSIDERED THE MERITS OF THE CASE AND DECIDED THE PRESENT ISSUE. OUR ATTENTION WAS DRAWN TO VARIOUS CLAUSES OF PARTNERSHIP DEED, UNDER WHICH THERE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 10 WAS STATUS OF SOCIETIES I.E. THE ASSESSEE WHICH WAS A COOPERATIVE SOCIETY WHICH WAS ESTABLISHED WITH THE AIM OF CRUSHING SUGARCANE OF MEMBERS ENT ERED INTO THE SAID PARTNERSHIP. THE ASSESSEE WAS CONTRIBUTING MATERIAL THROUGH ITS MEMBERS. THE WORKFORCE WAS ALSO PROVIDED BY THE ASSESSEE ALONG WITH MACHINERY AND WAS RESPONSIBLE FOR THE METHODS TO BE UTILIZED IN CRUSHING THE SUGARCANE. THE OTHER PARTN ER WAS WORKING PARTNER, WHO HAD INFUSED MONEY AND EXPERTISE IN RUNNING THE SUGAR FACTORY. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEES INTEREST IN THE SAID PARTNERSHIP WAS THAT ITS MEMBER CANE GROWERS, CANE IS USE D FOR CRUSHING AND ALSO APPROPRIATE AND TIMELY WAGES ARE PAID TO ITS WORKFORCE, SO THAT THERE IS NO UNREST AND POSSIBILITY OF MONEY GETTING JEOPARDIZED IS REDUCED. FURTHER, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE ASSESSEE WAS CARRYING ON THE SAID ACTIVITY , WHERE IT WAS ITS DUTY TO SUPPLY CANE AND ALSO TO UNDERTAKE THAT THE PLA NT WAS FUNCTIONING PROPERLY AND WORKFORCE ARE CARRYING ON THEIR DUTIES. HE STRESSED THAT SOME RISKS VIS - - VIS BUSINESS ASPECTS WERE BEING CARRIED ON BY THE ASSESSEE AND IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS. OUR ATTENTION WAS DRAWN TO THE ORDER OF CIT(A) IN THIS REGARD, WHERE HE HAD OBJECTED TO THE CLAIM OF ASSESSEE THAT IT WAS NOT CARRYING ON ANY BUSINESS ACTIVITY AND AL SO STATED THAT THERE WAS NO COMPLEXITY IN RENTING OUT THE SUGAR FACTORY. IN REPLY, IT WAS STATED THAT IN THE CASE OF ASSESSEE, WHERE THE SUGAR FACTORY WAS COMPLEX STRUCTURE, THEN THE ACTIVITY ENGAGED IN BY THE ASSESSEE COULD NOT BE CALLED SIMPLE RENTING. THE ASSESSEE WAS ENGAGED IN CARRYING ON THE BUSINESS ACTIVITY BY WAY OF PROVIDING SUGARCANE OF ITS 1 2982 FOR CRUSHING AND ALSO PROVIDING WORKFORCE TO RUN THE FACTORY. FURTHER, WHERE THE UNIT WAS GIVEN ON SHORT OR LONG TERM LEASE CANNOT DECIDE THE ASSESSA BILITY OF INCOME IN THE HANDS OF ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 11 HONBLE SUPREME COURT IN SHAMBHU INVESTMENT (P) LTD. VS. CIT (2003) 263 ITR 143 (SC) AND HONBLE HIGH COURT OF CALCUTTA IN CIT VS. SHAMBHU INVESTMENT (P.) LTD. (2001) 249 ITR 47 (CAL) AND POINTED OUT THAT THE INTENTION HAS TO BE SEEN AS TO WHETHER THE ASSE T WAS EXPLOITED AS A N OWNER OR AS COMMERCIAL ASSET. WHERE THE ASSESSEE HAD ADOPTED RISK FOR EARNING THE REMUNE RATION, THEN THE SAID INCOME IS TO BE ASSESSED AS BUSINESS INCOME. HE F URTHER RELIED ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN CIT VS. FRANCIS WACZIARG (2013) 353 ITR 187 (DEL) . IT WAS FURTHER POINTED OUT BY HIM THAT THE ASSESSING OFFI CER IN ASSESSMENT YEAR 2011 - 12 WAS OF THE VIEW THAT THIS WAS THE BUSINESS INCOME AND THE PLEA OF THE ASSESSEE WAS ACCEPTED BY ORDER PASSED UNDER SECTION 143(3) OF THE ACT. WITHOUT PREJUDICE, IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT EVEN IT IS HELD TO BE NOT BUSINESS INCOME, THEN THE SAME IS AN ADVENTURE IN THE NATURE OF TRADE AND IS TO BE ASSESSED AS BUSINESS INCOME. IN RESPECT OF INCOME FROM DISTILLERY UNIT, IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTAT IVE FOR THE ASSESSEE THAT ONLY WHEN SUGAR FACTORY WAS RUN, MOLASSES WOULD BE PRODUCED AND DIST I LLERY WOULD FUNCTION. HE ALSO STATED THAT IN CASE OF DISTILLERY, THERE WAS NO PERMISSION UNDER SECTION 20 OF THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT. HE STR ESSED THAT APPLYING FUNCTION ASSET AND RISK TEST, INCOME EARNED BY THE ASSESSEE IS TO BE ASSESSED AS BUSINESS INCOME. 11. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD RECEI VED SUM OF RS.3.02 CRORES FROM AOP AND RENTAL INCOME FROM DISTILLERY UNIT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT THERE WAS NO RISK TAKEN BY THE ASSESSEE EXCEPT THAT NO FIXED OR MINIMUM AMOUNT HAS BEEN DECIDED. REFERRING TO THE CLAUSES OF PARTNERSHIP DEED, THE LEARNED ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 12 DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT THERE IS NO SAY OF THE ASSESSEE, IN THE ACTIVITY BEING CARRIED ON BY THE SAID PARTNERSHIP. FURTHER, THE MEMBERS OF COOPERATIVE SOCIETY HAVE TO MAKE SUP PLIES AND THOUGH ENTIRE WORKFORCE IS PROVIDED BUT THE SAID CONCERN CAN HAVE ITS OWN WORK SOURCE. IT WAS FURTHER POINTED OUT THAT THE PARTNERSHIP DEED WAS MADE FOR A PERIOD OF 15 YEARS WITH CLAUSE OF EXTENSION WHICH ESTABLISHED THAT THERE WAS NO INTENTION TO REVERT BACK TO THE BUSINESS BEING CARRIED ON. IN THIS REGARD, REFERENCE WAS MADE TO CLAUSES 15 AND 16 OF PARTNERSHIP DEED. SINCE THE ENTIRE CONTROL WAS WITH JAWAHAR, INCOME WAS RIGHTLY ASSESSED AS INCOME FROM OTHER SOURCES. ANOTHER ASPECT REFERRED TO BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS THAT THE PROPOSED PARTNERSHIP HAD TREATED THE PAYMENT IN THE NATURE OF LEASE RENT AND HAD DEDUCTED TAX AT SOURCE. HE FURTHER PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COUR T IN NEW SAVAN SUGAR & GUR REFINING CO. LTD. VS. CIT (1969) 74 ITR 7 (SC) AND ALSO ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF BOMBAY IN SASWAD MALI SUGAR FACTORY LTD. VS. CIT (1999) 236 ITR 706 (BOM) . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR T HE REVENUE FAIRLY POINTED OUT THAT POINT OF D IFFERENCE IN THE CASE BEFORE THE TRIBUNAL AND IN ALL OTHER CASES WAS THAT IN THE PRESENT CASE, IT WAS A PARTNERSHIP DEED, WHEREAS IN THE OTHER CASES, IT WAS LEASE AGREEMENT. FURTHER, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN M/S. JAGDAMBA SAHAKARI SAKHAR KARKHANA LTD. VS. CIT IN ITA 991/PN/2013, RELATING TO ASSESSMENT YEAR 2008 - 09, ORDER DATED 06.11.2015 , WHEREIN HE ADMITTED THAT THERE WAS FIXED PERIODIC RENT TO BE PAID ON ACCOU NT OF LEASE. 12. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REJOINDER STATED THAT THOUGH THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE SAYS THAT THERE IS NO ROLE IN MANAGEMENT BUT IN CALUSE 7 OF AGREEMENT, ONE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 13 DIRECTOR WAS PERSON OF THE ASSESSEES SOCIETY AND THOUGH THE DECISION MAKING WAS BY JAWAHAR BUT THE INTENTION WAS TO RUN THE BUSINESS EFFICIENTLY. HE FURTHER STATED THAT MERELY BECAUSE THE PAYER HAD TREATED THE PAYMENT AS RENT, THE SAME IS NOT BINDING TO DETERMINE THE NATURE OF RECEIPT. FURTHER, WITH REGARD TO RELIANCE PLACED UPON THE DECISION OF HONBLE SUPREME COURT IN NEW SAVAN SUGAR & GUR REFINING CO. LTD. VS. CIT (SUPRA) BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , IT WAS POINTED OUT THAT IN THE FACTS OF SAID CASE, THERE WAS FIXED RENTAL PAY MENT , WHEREAS IN THE FACTS OF ASSESSEE, S AME WAS PERFORMANCE BASIS. IN RESPECT OF RELIANCE ON THE RATIO LAID DOWN BY HONBLE HIGH COURT OF BOMBAY IN SASWAD MALI SUGAR FACTORY LTD. VS. CIT (SUPRA) , IT WAS POINTED OUT TH AT IN THE FACTS OF SAID CASE, THE AGREEMENT WAS FOR A PERIOD OF TWO YEARS, WHICH IN TURN, WAS FOLLOWED BY SALE. FURTHER, IN RESPECT OF RELIANCE PLACED UPON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN M/S. JAGDAMBA SAHAKARI SAKHAR KARKHANA LTD. VS. CI T (SUPRA) , IT WAS POINTED OUT BY HIM THAT THE FACTORY WAS IN LIQUIDATION, THE SAME WAS LEASED OUT AND WHERE A COMPANY IS IN LIQUIDATION, THERE IS NO QUESTION OF D OING ANY B USINESS AND SECONDLY, IT HAD RECEIVED FI XED RENT AS AGAINST AGREEMENT, THE ASSESSEE TO RECEIVE VARIABLE R ECEIPTS . ANOTHER POINT RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE PARTNERSHIP WAS FORMED UNDER THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, WHICH PROVIDED THAT THE PROVISIONS OF PARTNERSHIP ACT WOULD NOT APPLY. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING BEFORE US IS IN RESPECT OF ASSESSABILITY OF INCOME RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE WAS A COOPERATIVE SOCIETY UNDER SECTION 9 OF THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960 AND HAD ENTERED INTO A DEED OF PARTNERSHIP WITH M/S. SHRIRAM ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 14 JAWAHAR SHETAKARI SAHAKARI SAKHAR UDYOG (JAWAHAR) ON 09.10.2006. AS PER THE UNDERSTANDING BETWEEN THE TWO PARTIES, WHERE THE ASSESSE E WAS A COOPERATIVE SOCIETY REGISTERED UNDER SECTION 9 OF MAHARASHTRA CO - OPERATIVE SOCIETIES ACT AND JAWAHAR WAS A REGISTERED CO OPERATIVE SOCIETY UNDER MULTI STATE COOPERATIVE SOCIETIES ACT, 1984, FORMED A PARTNERSHIP OF SOCIETIES UNDER SECTION 20 OF MAHAR ASHTRA COOPERATIVE SOCIETIES ACT, 1960, TO UNDERTAKE THE BUSINESS OF PROCESSING OF AGRICULTURAL PRODUCE MAINLY SUGARCANE, BY UTILIZING THE EXISTING SUGARCANE CRUSHING PLANT OF THE PARTY OF THE F IRST PART LOCATED IN PHALTAN TALUKA, DISTRICT SATARA . THE ASS ESSEE OWNED A FULL - FLEDGED SUGARCANE PROCESSING FACTORY OF 2500 M.TONS, LICENSED CAPACITY PER DAY AND HAD INSTALLED CAPACITY OF 2000 TCD IN RUNNING CONDITION AND BECAUSE OF FINANCIAL CRUNCH, THE ASSESSEE ENTERED INTO THIS PARTNERSHIP DEED, WHEREIN THE ROLE OF JAWAHAR WAS TO INFUSE FINANCES AND ALSO EXPERTISE. THE ASSESSEE WAS THE EXCLUSIVE OWNER AND WAS IN ABSOLUTE AND ENTIRE POSSESSION OF LAND, PLANT & MACHINERY, TOOLS, EQUIPMENTS FOR CRUSHING THE SUGARCANE OF ITS MEMBERS I.E. SUGAR PLANT WHICH WAS DESCRI BED IN DETAIL IN PART I AND II OF SCHEDULE ATTACHED TO THE DEED. AS PER PART I OF SCHEDULE , DETAILS OF LAND, BUILDING , PLANT & MACHINERY WERE PROVIDED AND IN PART II OF SCHEDULE, THE DETAILS OF VARIOUS RIGHTS, LICENCES, CLAIMS AND PRIVILEGES OF PARTNERS, WHICH WERE BEING V ESTED IN WORKING PARTNER WERE PROVIDED. THE SUGAR PLANT OWNED BY THE ASSESSEE WAS BACKED UP BY SUGARCANE PRODUCE OF 12982 MEMBERS AND ALSO THE SUGARCANE PRODUCE OF NON - MEMBERS FROM ADJOINING AREAS AND IN ORDER TO MORE EFFICIENTLY RUN THE OPERATIONS IN THE INTEREST OF MEMBERS, IT WAS DECIDED THAT SINCE ADDITIONAL FUNDS AND MANAGERIAL BACK UP AND EXPERTISE COULD NOT BE MOBILIZED BY THE ASSESSEE DUE TO ITS NEGATIVE NETWOR TH , THE DECISION WAS TAKEN TO FORM THE PARTNERSHIP. FURTHER, PRODUCE R MEMBERS OF THE ASSESSEE SOCIETY THROUGH RESOLUTION OF SPECIAL GENERAL MEETING DATED 10.09.2006 RESOLVED THAT THE PRODUCER MEMBERS ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 15 OF ASSESSEE SOCIETY SHALL BE ENTITLED FOR AVAILMENT OF THEIR RIGHTS AS MEMBERS FOR MARKETING OF THEIR SUGARCANE TO THE PARTNER SHIP PROPOSED UNDER THE DEED. 14. THE SECOND PART Y TO THE PARTNERSHIP I.E. JAWAHAR HAD A LICENSE D CRUSHING CAPACITY OF 7500 TCD UNDER IEM DATED 29.01.2001 AND INSTALLED CAPACITY OF 6500 TCD WAS CONVINCED ABOUT THE POTENTIAL OF BUSINESS, ESPECIALLY SUGAR CANE AVAILABILITY AND DEPENDABILITY OF SUGAR FACTORY AS PROCESSING UNIT AND THEREFORE, DECIDED TO ACCEDE TO THE REQUEST OF ASSESSEE FOR SHARING ITS STRENGTH AND EXPERTISE AND ALSO THE PRINCIPLE OF COOPERATION VIS - - VIS CONCERN FOR THE SOCIETY AND THEREBY A CCEPTED THE OFFER OF ASSESSEE TO SHARE MUTUAL STRENGTH BY WAY OF COOPERATIVE PARTNERSHIP. THE DEED EXECUTED BETWEEN THE TWO PARTIES RECOGNIZED THAT THE PARTY OF THE FIRST PART I.E. ASSESSEE HAD THE APPROVAL OF ITS MEMBERS BY WAY OF RESOLUTION PASSED UNANI MOUSLY BY THE MEMBERS PRESENT IN THE SPECIAL GENERAL MEETING HELD ON 10.09.2006 FOR SUCH A PARTNERSHIP. FURTHER, THE PARTY OF THE SECOND PART I.E. JAWAHAR HAD ALSO GOT THE APPROVAL OF THEIR BOARD OF DIRECTORS AS EMPOWERED BY THEIR GENERAL BODY RESOLUTION DATED 13.06.2006 AND THEIR BYELAWS. THE PARTIES, THEREFORE, AFTER ADEQUATE , DUE DELIBERATIONS , DIS CUSSIONS AND UNDERSTANDING, EXECUTED A PARTNERSHIP FOR THE OPERATION OF SAID SUGAR PLANT THROUGH AN INDEPENDENT BODY I.E. PARTNERSHIP ( REFERRED TO AS MANAGEM ENT) . IT W AS MUTUALLY AGREED BETWEEN THE PARTIES THAT THE NAME OF PARTNERSHIP WOULD BE SHRIRAM JAWAHAR SHETKARI SAHAKARI SAHKAR UDYOGM . THE MAIN OBJECT OF THE PARTNERSHIP AS PER CLAUSE 2 WAS TO PROCESS SUGARCANE THROUGH EXISTING UNIT OF THE PARTY OF TH E FIRST PART AND FURTHER, IT WAS ENTITLED TO CARRY ON ANY OTHER BUSINESS OF ANY KIND , WITH MUTUAL CONSENT OF BOTH THE PARTIES. AS PER CLAUSE 3 OF PARTNERSHIP DEED, PRINCIPAL PLACE OF BUSINESS WAS FACTORY SITE AT PHALTAN AND ALSO THE REGISTERED OFFICE AS P ER CLAUSE 4 WAS THE PREMISES OF ASSESSEE AT PHALTAN . AS PER CLAUSE 5, PARTNERSHIP SHALL BE A ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 16 PARTICULAR PARTNERSHIP UNDER SECTION 20 OF THE MAHARASHTRA COOPERATIVE SOCIETIES ACT AND IT SHALL BE PARTICULAR IN RESPECT OF CARRYING ON THE BUSINESS OF PROCESSI NG OF SUGARCANE THROUGH THE CRUSHING MULL OF ASSESSEE AT PHALTAN. THE PERIOD OF PARTNERSHIP WAS AGREED TO BE 15 YEARS AND THE SAME COULD BE EXTENDED MUTUALLY. THE CLAUSE 6 OF THE DEED IN RESPECT OF CAPITAL CONTRIBUTION PROVIDED AS UNDER: - 6. CAPITAL CO NTRIBUTION : A ) THE PARTNER HEREBY OFFER THE SAID SUGAR PLANT FOR USAGE AS THE CAPITAL CONTRIBUTION IN KIND TO THE PARTNERSHIP FOR THE PERIOD OF FIFTEEN YEARS THAT MAY BE EXTENDED FROM TIME TO TIME. THE PARTNER HEREBY IN ADDITION TO THE CAPITAL IN KIND OFFE RS THE USAGE AND TO TRANSFER ALL LICENSES, INCLUDING INDUSTRIAL LICENSE & OTHER LICENSES, PERMITS, RIGHTS, CLAIMS EASEMENTS WHICH WERE BEING ENJOYED SO FAR BY THE PARTNER FOR THE USE BY THE PARTNERSHIP DURING THE ENTIRE PERIOD OF PARTNERSHIP FOR WHICH THE PARTNER IS ENTITLED AND BE ASSURED FOR COMPENSATION. B ) THAT THE SAID WORKING PARTNER SHALL BRING IN ADEQUATE WORKING AS WELL AS BLOCK CAPITAL FROM TIME TO TIME AS MAY BE REQUIRED FOR RUNNING THE SAID SUGAR PLANT AS ITS CONTRIBUTION TO THE PARTNERSHIP OF BOT H THE CO - OPERATIVE SOCIETIES WHICH MAY BE USED FOR MANAGING THE OPERATIONS OF THE SAID SUGAR PLANT. THE CONTRIBUTION SHALL BE MADE OPERATIONS OF THE SAID SUGAR PLANT. THE CONTRIBUTION SHALL BE MADE BY THE WORKING PARTNER AND THAT SHALL BE REFUNDED AS MUTUALLY AGREED BY BOTH THE PARTNERS. 1 5 . THE ASSESSEE HAD OFFERED IT S SUGAR PLANT ALONG WITH LICENSES, PERMITS, RIGHTS, CLAIMS, ETC. AND THE OTHER PARTY I.E. JAWAHAR WAS THE WORKING PARTNER, WHICH WAS TO INFUSE THE CAPITAL FROM TIME TO TIME AS MAY BE REQUIRED FOR RUNNING THE SUGAR PLANT AND ALSO TO MANAGE THE OPERATIONS OF THE SAID SUGAR PLANT. IT WAS SPECIFICALLY AGREED BETWEEN THE PARTIES THAT THE CONTRIBUTION SHALL BE MADE BY THE WORKING PARTNER AND THAT SHALL BE REFUNDED AS MUTUALLY AGREED BY BOTH THE PARTIES. WITH REGARD TO MANAGEMENT OF PARTNERSHIP, CLAUSE 7 PROVIDE S THAT IT SHALL VEST IN ANY THREE MEMBERS WHO WOULD BE DESIGNATED AS PARTNER DIRECTORS. TWO SUCH PARTNER DIRECTORS WERE TO BE NOMINATED AND APPOINTED BY THE WORKING PARTNER WHILE THE OTHER PARTNER I.E. THE ASSESSEE WOULD APPOINT ONE PARTNER DIRECTOR. THE DAY - TO - DAY BUSINESS OPERATIONS WERE TO BE CARRIED OUT BY ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 17 THE T HREE PARTNER DIRECTORS. HOWEVER, IN CASE OF DIFFERENCE IN OP INION, IT WAS PROVIDED THAT MAJORITY SHALL PREVAIL. FURTHER FOR DAY - TO - DAY MANAGEMENT, THE WORKING PARTNER HAD RIGHT TO CREATE, APP OINT APPROPRIATE EXECUTIVES, EXPERTS AND OTHERS. 16. FURTHER, C LAUSE 9 PROVIDED AS UNDER: - 9. SHARING OF RISKS AND/OR PROFITS: SINCE THE PARTY OF THE SECOND PART IS BRINGING ITS ENTIRE STRENGTH OF FINANCE AND EXPERTISE AND IS SHOULDERING THE RESPONSIBI LITY OF ENTIRE DAY TO DAY MANAGEMENT AND EXECUTION, IT WILL BE ENTITLED FOR ALL THE PROFITS AFTER PAYMENT OF COMPENSATION @ RS.100/ - PER M.T. OF SUGARCANE CRUSHED FOR THE FIRST FIVE CRUSHING SEASONS I.E. FROM 2006 - 2007 TO 2010 - 2011, @ RS. 110/ - PER MT FOR NEXT PERIOD OF FIVE YEARS I.E. FROM CRUSHING SEASONS 2011 - 2012 TO 2015 - 2016 AND @ RS. 120/ - PER M.T. FOR THE FU R THER PERIOD OF FIVE YEARS I.E. FROM CRUSHING SEASONS 2016 - 2017 TO 2020 - 2021 TO TILE PARTNER, ALL THE EXPENSES, LIABILITIES INCLUDING THE TAX LIA BILITIES AS APPROVED BY THE COMMISSIONER OF SUGAR AND REGISTRAR OF CO - OPERATIVE SOCIETIES UNDER HIS ORDER NO. 77/2006 DTD. 30/9/2006. THE PARTNER SHALL NOT BE RESPONSIBLE FOR ANY LOSSES OR SHORTAGES IN THE OPERATIONS OF THE SAID SU G AR PLANT BY THE WORKING PARTNER . TH E PARTNER SHALL BE ENTITLED FOR THE COMPENSATION AS ENUMERATED HEREUNDER AND THE BENEFITS OF FUTURE DEVELOPMENTS WHICH WOULD ACCRUE THEM THROUGH THE MODERNIZATION AND EXPANSION, DIVERSIFICATION OF THE SAID SUGAR PLANT AND ACTIVITIES BY THE WORK ING PARTNER . THE PARTNER SHALL ALSO BE ENTITLED TO ENSURE THAT THE PRIVILEGES OF THE PARTNER . THE PARTNER SHALL ALSO BE ENTITLED TO ENSURE THAT THE PRIVILEGES OF THE MEMBERS ARE TO BE GIVEN IN THE CONTEXT OF SUGARCANE DEVELOPMENT PROGRAMMES AND THE TIMELY CRUSHING OF ENTIRE CANE OF ITS MEMBERS BY THE MANAGEMENT. AS PER CLAUSE 9, IT WAS MUTUALLY AGREED BETWEEN THE PARTIES THAT THE PARTY OF THE FIRST PART WOULD BE COMPENSATED AT A FIXED PRICE PER MT OF SUGARCANE CRUSHED FOR THE RESPECTIVE YEARS. THE ASSESSEE WAS NOT RESPONSIBLE FOR ANY LOSSES OR SHORTAGES IN THE OPERATIONS OF SAID SUG AR PLANT BY WORKING PARTNER. FURTHER, IT WAS AGREED BETWEEN THE PARTIES THAT THE WORKING PARTNER SHALL NOT TAKE OVER THE FINANCE LIABILITIES APPEARING IN THE BALANCE SHEET OF THE ASSESSEE AS ON DATE OF PARTNERSHIP, EXCEPT THE ONE RELATING TO REPAYMENT OF MAHARASHTRA STATE COOPERATIVE BANK S R ESTRUCTURED LOAN VIDE ORDER DATED 24.02.2006 . FURTHER, THE PARTNER ALSO INDEMNIFIED THE WORKING PARTNER IN CASE OF ADVERSE ORDERS / ACTIONS OF CRED ITORS EXCEPT THE APEX BANK. THIS WAS PROVIDED AS PER CLAUSE 10 OF THE DEED. FURTHER, AS PER CLAUSE 15, IT WAS AGREED UPON ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 18 THAT THE PARTNER I.E. ASSESSEE WOULD UNDERTAKES TO MAKE AVAILABLE THE SERVICES OF ALL WORKING EMPLOYEES EXC EPT THOSE WORKING IN DISTILLERY, WITH IMMEDIATE EFFECT, FOR THE OPERATION, MANAGEMENT AND RUNNIN G OF THE SUGAR PLANT. THE BIPARTITE AGREEMENT AMONGST THE PARTNER AND RE COGNIZED / APPROVED WORKER UNION WAS APPENDED TO THE PARTNERSHIP DEED AS ANNEXURE - I AND THE SAME WOULD CONTINUE TO GOVERN THE MODALITIES REGARDING THE SERVICES OF SUCH EMPLOYEES. IT WAS AGREED BETWEEN BOTH THE PARTIES THAT THE WAGES / SALARY OF WORKFORCE DEPLOYED BY THE PARTNER SHALL BE PAID BY THE MANAGEMENT TO THE PARTNER, WHO IN TURN, SHALL DISBURSE IT AMONGST THE WORKERS IN THE PRESENCE OF REPRESENTATIVE OF THE MANAGEMENT. THE PR EVAILING TAX LAWS SHALL BE APPLICABLE AND THE MANAGEMENT WOULD DEPOSIT THE PF OF THE SAID WORKERS / EMPLOYEES WITH THE PF AUTHORITIES DIRECTLY. THE OTHER FRINGE BENEFITS I.E. BONUS, GRATUITY, LEAVE SALARY S HALL BE PAID BY THE MANAGEMENT. HOWEVER, THE LIA BILIT Y OF TENURE OF SERVICES WITH THE PARTNER, OTHER THAN WITH THE MANAGEMENT, SHALL BE SOLE RESPONSIBILITY OF THE PARTNER AND IN CASE THE SAME WAS NOT PAID BY THE PARTNER, IT WAS AGREED THAT THE MANAGEMENT SHALL NOT BE RESPONSIBLE FOR THE SAME. IT WAS AL SO AGREED THAT THE SERVICES OF EMPLOYEES / WORKERS OF THE SAID SUGAR PLANT WOULD BE UTILIZED BY THE MANAGEMENT. IN CASE OF ANY PAST LIABILITIES OF THE PARTNER REGARDING DUES TO WORKERS / EMPLOYEES OR TO THE STATUTORY AUTHORITIES AND IF THE SAME WAS IMPOSE D ON THE MANAGEMENT OF WORKING PARTNER, THEN THE SAME SHALL BE MADE GOOD BY THE PARTNER AND THE MANAGEMENT SHALL NOT BE RESPONSIBLE FOR ANY SUCH LIABILITY. AS PER SUB - CLAUSE (D) TO CLAUSE 15, THE MANAGEMENT WAS AT LIBERTY TO EMPLOY ADDITIONAL WORKFORCE NE CESSARY FOR IT AND PAYMENT OF SALARY / WAGES / FRINGE BENEFITS WAS THE RESPONSIBLE OF THE MANAGEMENT. IT WAS FURTHER PROVIDED THAT THE PARTNER I.E. ASSESSEE SHALL TAKE THE DISCIPLINARY PROCEEDINGS AND ACTION AGAINST WORKERS / EMPLOYEES OF THE PARTNER AND FURTHER, NO WORKER / EMPLOYEE HAD A RIGHT TO PROCEED DIRECTLY / ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 19 INDIRECTLY IN ANY MATTER AGAINST THE WORKING PARTNER. AS PER CLAUSE 18 OF THE DEED, THE PARTNER DECLARED AND COMMITTED TO DIFFERENT CONDITIONS AS HIS RESPONSIB ILITY. AS PER O NE OF THE CLAUSE S, IT WAS ALSO AGREED THAT THE PARTNER SHALL ENSURE ADEQUATE ACTION AND EFFORTS FROM THEIR SIDE FOR PROVIDING CANE TO THE SUGAR PLANT FROM ITS MEMBERS AND NON - MEMBER S. THE PRODUCER MEMBERS OF THE PARTNER SHALL BE BOUND TO SUPPLY THE CANE TO THE MANAGEMENT AS RESOLVED IN THE SPECIAL GENERAL BODY MEETING DATED 10.09.2006 AND THE MANAGEMENT SHALL BE BOUND TO ACCEPT THE CANE OF SUCH PRODUCER MEMBERS TREATING THEM AS THEIR DEEM ED MEMBERS AND THEY SHALL BE ENTITLED FOR ALL THE BENEFITS OF THE MEMB ERSHIP OF PARTN ER TO THE EX TENT RELEVANT FOR THE SAID MANAGEMENT, WAS THE UNDERSTANDING BETWEEN THE PARTNERS AS PER CLAUSE 18(H). FURTHER, CLAUSES WERE AGREED TO BETWEEN THE PARTIES ARE NOT RELEVANT FOR DECIDING THE ISSUE BEFORE US. THE SAID PARTNERSHIP FILED THE RETUR N OF INCOME FOR ASSESSMENT YEAR 2008 - 09 IN THE STATUS OF COOPERATIVE SOCIETY. 17. THE CLAUSE 20 OF MAHARASHTRA COOPERATIVE SOCIETIES ACT, 1960 READS AS UNDER: - 20. PARTNERSHIP OF SOCIETIES. (1) ANY TWO OR MORE SOCIETIES MAY, WITH THE PRIOR APPROVAL OF THE REGISTRAR BY RESOLUTION PASSED BY THREE - FOURTHS MAJORITY OF THE MEMBERS PRESENT AND VOTING AT A GENERAL MEETING OF EACH SUCH SOCIETY, ENTER INTO PARTNERSHIP FOR CARRYING OUT ANY SPECIFIC BUSINESS OR BUSINESS, PROVIDED THAT EACH MEMBER HAS HAD CLEAR TEN DAYS, WRITTEN NOTICE OF THE RESOLUTION AND THE DATE OF THE MEETING. PROVIDED THAT, IN CASE OF A SOCIETY WHICH HAS NOT TAKEN ANY FINANCIAL ASSISTANCE FROM THE GOVERNMENT, IN THE FORM OF SHARE CAPITAL, LOAN OR GUARANTEE, THE PRIOR APPROVAL OF THE REGISTRAR FOR ENTERING INTO SUCH PARTNERSHIP SHALL NOT BE REQUIRED. (2) NOTHING IN THE INDIAN PARTNERSHIP ACT, 1932, SHALL APPLY TO SUCH PARTNERSHIP. 1 8 . AS PER THE SAID SECTION 20, IT IS PROVIDED THAT ANY TWO OR MORE SOCIETIES WITH PRIOR APPROVAL OF THE REGIST RAR, OBTAIN RESOLUTION PASSED BY THE MAJORITY OF ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 20 THE MEMBERS PRESENT AT THE GENERAL MEETING OF SUCH SOCIETY, ENTER INTO A PARTNERSHIP FOR CARRYING OUT SPECIFIC BUSINESS. IT IS PROVIDED THAT EACH MEMBER SHOULD HAVE CLEAR 10 DAYS WRITTEN NOTICE OF THE RESOL UTION AND THE DATE OF MEETING. IT IS FURTHER PROVIDED THAT IN CASE OF SOCIETY WHICH HAD NOT TAKEN ANY FINANCIA L ASSI STANCE FROM THE GOVERNMENT, IN THE FORM OF SHARE CAPITAL, LOAN OR GUARANTEE, THE PRIOR APPROVAL OF THE REGISTRAR FOR ENTERING INTO SUCH PAR TNERSHIP SHALL NOT BE REQUIRED. VIDE CLAUSE (2) TO SECTION 20, IT IS PROVIDED THAT NOTHING IN THE INDIAN PARTNERSHIP ACT, 1932 SHALL APPLY TO SUCH PARTNERSHIP. UNDER THE PROVISIONS OF SECTION 20 OF THE MAHARASHTRA COOPERATIVE SOCIETIES ACT, ANY TWO OR MO RE COOPERATIVE SOCIETIES HAVE THE LIBERTY TO ENTER INTO PARTNERSHIP FOR THE PURPOSE OF CARRYING OUT SPECIFIC BUSINESS. THE SECTION ITSELF PROVIDES THAT PERMISSION IS TO BE OBTAINED FOR ENTERING INTO SUCH A PARTNERSHIP. THE PRIOR APPROVAL IS TO BE OBTAINE D FROM THE REGISTRAR BY WAY OF RESOLUTION PASSED BY THREE - FOURTHS MAJORITY OF THE MEMBERS PRESENT AND VOTING AT THE GENERAL MEETING OF EACH SUCH SOCIETY, FOR WHICH CLEAR 10 DAYS WRITTEN NOTICE OF THE RESOLUTION AND DATE OF MEETING HAS TO BE GIVEN TO THE ME M BERS. IN CASE ANY PAR TNERSHIP IS FORMED OF THE SOCIE TIES UNDER SECTION 20 OF THE MAHARASHTRA COOPERATIVE SOCIETIES ACT, THEN THE SECTION ITSELF PROVIDES THAT NOTHING IN INDIAN PARTNERSHIP ACT, 1932 SHALL APPLY TO SUCH A PARTNERSHIP. IN OTHER WORDS, THE PROVISIONS PROVIDED UNDER THE INDIAN PARTNERSHIP ACT, WOULD NOT GOVERN A PARTNERSHIP OF TWO OR MORE SOCIETIES, WHICH WAS FORMED UNDER SECTION 20 OF MAHARASHTRA COOPERATIVE SOCIETIES ACT. 1 9 . THE ASSESSEE BEFORE US WAS A COOPERATIVE SOCIETY WHICH WAS RUN NING SUGAR PLANT AT PHALTAN. THE ASSESSEE WAS NOT ABLE TO EFFICIENTLY RUN THE SAID SUGAR PLANT AND CONSEQUENTLY, IN ORDER TO LOOK AFTER THE INTEREST S OF MEMBERS OF ITS COOPERATIVE SOCIETY, TOTALING ABOUT 12 982 AND ALSO NON - MEMBERS I.E. ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 21 PERSONS WHO WERE RE SIDING IN THE SURROUNDING AREAS AND WANTED THEIR SUGARCANE TO BE CRUSHED, SOUGHT PERMISSION FROM THE REGISTRAR OF COOPERATIVE SOCIETIES TO ENTER INTO A PARTNERSHIP WITH ANOTHER COOPERATIVE SOCIETY I.E. JAWAHAR SHETKARI SAHAKARI SAKRKHANA LTD. THE UNDERSTA NDING BETWEEN THE PARTIES WAS THAT THE ASSESSEE WOULD PROVIDE ITS SUGAR PLANT ALONG WITH ALL LICENSES, PERMITS, ETC. ALONG WITH PLANT & MACHINERY AND THE WORKFORCE TO RUN THE SAID SUGAR PLANT. THE OTHER PARTNER I.E. JAWAHAR HAD TO PROVIDE THE FINANCE SUPP ORT FOR DAY - TO - DAY RUNNING OF THE SUGAR PLANT AND HAD ALSO TO MANAGE THE AFFAIRS OF SUGAR PLANT IN ORDER TO EFFICIENTLY RUN THE SAME. THE ASSESSEE ADMITTED THAT WHILE CARRYING OUT ITS OPERATIONS, IT WAS NOT IN A POSITION TO EFFICIENTLY MANAGE ITS AFFAIRS AND THE MANAGEMENT OF SUGAR PLANT WAS HANDED OVER TO THE OTHER CONCERN TO EFFICIENTLY MANAGE IT. IT WAS THE UNDERSTANDING BETWEEN THE PARTIES THAT THE WORKFORCE ALREADY EMPLOYED IN THE SUGAR PLANT SHALL BE USED BY THE NEW CONCERN FOR RUNNING THE SUGAR PLA NT. HOWEVER, IT WAS ALSO AGREED BETWEEN THE PARTIES THAT IN CASE FOR THE MANAGEMENT OF SAID SUGAR PLANT, THERE WAS REQUIREMENT OF ADDITIONAL WORKFORCE, THEN THE SAME WOULD BE PROVIDED BY THE OTHER PARTNER. THE INTENTION OF THE ASSESSEE TO ENTER INTO THE PARTNERSHIP WAS TO UTILIZE THE SUGARCANE PRODUCED BY ITS 12982 MEMBERS AND ALSO SUGARCANE PRODUCE OF THE NON - MEMBERS FROM ADJOINING AREA S, AT THE APPROVAL OF ITS MEMBERS BY WAY OF RESOLUTION UNANIMOUSLY PASSED BY THE MEMBERS PR ESENT IN THE SPECIAL GENERAL MEETING HELD ON 10.09.2006 FOR SUCH A PARTNERSHIP. ON THE OTHER HAND, THE OTHER CONCERN I.E. JAWAHAR HAD ALSO GOT APPROVAL OF THEIR BOARD OF DIRECTORS AS EMPOWERED BY THEIR GENERAL BODY RESOLUTION DATED 13.06.2006 AND ALSO AS PER THEIR BYELAWS TO ENTER IN TO THE SAID PARTNERSHIP. THE DEED OF PARTNERSHIP WAS EXECUTED AT PHALTAN ON 09.10.2006 AFTER BOTH THE PARTIES HAD THE APPROVAL FROM MEMBERS OF THEIR RESPECTIVE SOCIETIES. IN OTHER WORDS, THE TERMS OF SECTION 20 OF MAHARASHTRA COOPERATIVE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 22 SOCIETIES ACT, W ERE FULFILLED ONCE THE APPROVAL WAS RECEIVED FROM THE MEMBERS OF RESPECTIVE SOCIETIES, TO ENTER INTO A PARTNERSHIP AS STIPULATED IN SECTION 20 OF MAHARASHTRA COOPERATIVE SOCIETIES ACT. THE TWO PARTIES EXECUTED THE PARTNERSHIP DEED BY MUTUALLY AGREEING TO VARIOUS TERMS AND CONDITIONS , WHICH WE HAVE REFERRED TO IN PARAS HEREINABOVE . THE AIM OF ASSESSEE WAS THAT THE SUGARCANE PRODUCED BY ITS MEMBERS ARE CRUSHED AND SUITABLE REMUNERATION IS PAID TO ITS MEMBERS AND ALSO NON - MEMBERS. THE CONTRIBUTION OF OTHER PARTNER WAS NOT ONLY THE FINANCIAL CONTRIBUTION BUT ALSO TO EFFECTIVELY MANAGE THE OPERATIONS OF SUGAR PLANT. UNDOUBTEDLY, THE SUGAR PLANT ALONG WITH ITS PLANT & MACHINERY AND THE LAND PERMITS, RIGHTS, ETC. WERE INFUSED BY THE ASSESSEE IN THE SAID PARTNER SHIP. FURTHER, EVEN THE WORKFORCE EMPLOYED BY THE ASSESSEE WAS TAKEN OVER BY THE OTHER PARTNER. THE RESPONSIBILITY TO PAY THE SAID WORKFORCE WAS UPON THE ASSESSEE THOUGH THE SAID REMUNERATION WAS TO BE REIMBURSED BY THE OTHER PARTNER. EVEN THE STATUTORY DUES IN RESPECT OF THE SAID WORKFORCE W ERE TO BE PAID THROUGH THE ASSESSEE BY THE OTHER WORKING PARTNER . UNDOUBTEDLY, THE NEW PARTNER HAD THE RIGHT TO ENGAGE ANY OTHER PERSONS TO RUN ITS BUSINESS BUT IT WAS CLEARLY AGREED BETWEEN THE PARTIES THAT THE EXI STING WORKFORCE OF SUGAR PLANT SHALL BE TAKEN OVER BY THE PARTNERSHIP F ORMED BETWEEN THE PARTIES. THE MANAGEMENT OF PARTNERSHIP WAS CARRIED OUT BY THE THREE PARTNER DIRECTORS , TWO OF WHICH WERE TO BE NOMINATED BY THE INCOMING SOCIETY AND ONE TO BE PROPOSE D BY THE ASSESSEE SOCIETY. THE DECISION MAK ING WAS TO BE MADE COMPULSORILY BY ALL THE THREE PARTNER DIRECTORS EXCEPT IN THE CASE OF DIFFERENCE OF OPINION, WHEREIN THE DECISION OF MAJORITY WOULD PREVAIL. IT WAS ALSO AGREED UPON BETWEEN THE PARTIES THAT TH E THREE PARTNER DIRECTORS SHALL MEET AT LEAST ONCE IN A MONTH AND MORE THAN ONCE IF THE NEEDS OF BUSINESS SO REQUIRE. THE ABOVE SAID CLEARLY ESTABLISHES THAT THOUGH THE WORKING OF THE UNIT WAS HANDLED BY THE INCOMING PARTNER BUT FOR THE MANAGEMENT OF PART NERSHIP , THERE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 23 WAS COLLECTIVE STRENGTH PUT IN BY BOTH THE ASSESSEE AND THE INCOMING PARTNER. THE BUSINESS WAS BEING RUN BY THE ASSESSEE SOCIETY BY NOMINATING ITS PARTNER DIRECTOR, WHO WAS PART OF DECISION MAKING. HOWEVER, DAY - TO - DAY BUSINESS OPERATIONS W ERE TO BE CARRIED OUT BY THE TWO PARTNER DIRECTORS OF THE WORKING PARTNER. IT WAS FURTHER AGREED UPON BETWEEN THE PARTIES THAT THE LIABILITIES OF THE ASSESSEE PRIOR TO FORMATION OF THE PARTNERSHIP SHALL NOT BE TAKEN OVER BY THE PARTNERSHIP EXCEPT THE ONE RELATING TO APEX BANK. 20 . NOW, COMING TO THE SHARING OF PROFITS WHICH WERE AGREED UPON BETWEEN THE PARTIES . SINCE THE WORKING PARTNER WAS BRINGING IN ITS ENTIRE STRENGTH OF FINANCE AND EXPERTISE AND SHOULDERING THE RESPONSIBILITY OF ENTIRE DAY - TO - DAY MA NAGEMENT AND EXECUTION, IT WAS AGREED UPON BETWEEN THE PARTIES THAT THE WORKING PARTNER WOULD BE ENTITLED TO ALL THE PROFITS AFTER PAYMENT OF COMPENSATION TO THE ASSESSEE AS AGREED FOR ON THE BASIS OF SUGARCANE CRUSHED FOR THE RESPECTIVE YEARS. IT WAS SPE CIFICALLY AGREED BETWEEN THE PARTIES THAT THE ASSESSEE SHALL NOT BE RESPONSIBLE FOR ANY LOSSES OR SHORTAGES IN THE OPERATIONS OF SAID SUGAR PLANT BY THE WORKING PARTNER. THE UNDERSTANDING BETWEEN THE PARTIES WAS TO EFFICIENTLY RUN THE SUGAR PLANT AND IN T URN, UTILIZE THE SUGARCANE PRODUCED BY THE MEMBERS OF ASSESSEE COOPERATIVE SOCIETY AND ALSO BY ITS NON - MEMBERS IN THE SAID AREA. THE ROLE OF WORKING PARTNER WAS TO EFFICIENTLY RUN THE SUGAR PLANT BY USING NOT ONLY ITS EXPERTISE BUT BY FINANCIAL INFUS IONS, IN VIEW OF WHICH PUMPING IN ITS FINANCIAL AND ALSO TAKING THE RESPONS IBILITY OF RUNNING THE BUSINESS , I T WAS AGREED AND IN VIEW OF THE FACT THAT THE SAID SUGAR PLANT WAS RUNNING INTO LOSSES, THE SPECIAL FORMULA TO SHARE THE PROFITS WAS AGREED UPON BETWEEN THE PARTIES. UNDOUBTEDLY, THE SAID AGREEMENT IS WITH THE PRIOR APPROVAL OF THE REGISTRAR OF COOPERATIVE SOCIETIES AND IT APPEARS TO BE ONE OF THE ACCEPTED MODE S OF SHARING PROFITS OF A BUSINESS RUN BY TWO COOPERATIVE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 24 SOCIETIES. THE PARTNERSHIP SO CONSTI TUTED IN THE PRESENT CASE BY THE ASSESSEE WITH JAWAHAR IS A SPECIAL VEHICLE CONSTITUTED AS PER THE PROVISIONS OF MAHARASHTRA COOPERATIVE SOCIETIES ACT, WHICH ADMITTEDLY, ARE TO BE APPLIED FOR THE FUNCTIONING OF COOPERATIVE SOCIETIES IN THE STATE OF MAHARAS HTRA. SECTION 20 OF THE SAID ACT RECOGNIZED THE PARTNERSHIP OF SOCIETIES WHICH STANDS ON A DIFFERENT FOOTING THAN THE PARTNERSHIP AS FORMED UNDER THE INDIAN PARTNERSHIP ACT , 1932. SUB - CLAUSE (2) OF SECTION 20 OF THE SAID ACT, VERY CATEGORICALLY LAYS DOWN THAT NOTHING CONTAINED IN THE INDIAN PARTNERSHIP ACT, 1932 SHALL APPLY TO SUCH PARTNERSHIPS. SINCE THE PARTNERSHIP ENTERED INTO BY THE ASSESSEE IS UNDER DIFFERENT STATUTE, T HEN IT COULD NOT BE HELD THAT THE PARTNERSHIP SO FORMED IS NOT TO BE RECOGNIZED A S PARTNERSHIP FIRM AS SOME OF THE CONDITIONS OF INDIAN PARTNERSHIP ACT ARE NOT COMPLIED WITH. 21. THE FIRST AND FOREMOST OBJECTION OF THE AUTHORITIES BELOW IS THAT THE SAID PARTNERSHIP DOES NOT PROVIDE THE SHARING OF LOSSES BETWEEN THE TWO PARTIES. THE PERUSAL OF TERMS AGREED UPON BETWEEN THE PARTIES CLEARLY REFLECTED THAT THERE IS NO SHARING OF LOSSES , WHICH HAS BEEN CATEGORICALLY SO PROVIDED. THE ASSESSEE PARTNER WAS TO BE COMPENSATED BY WAY OF SPECIFIC COMPENSATION BY FIXED RATE PER MT OF SUGARCANE CRUSHED FOR THE RESPECTIVE CRUSHING SEASONS. THE WORKING PARTNER WHO HAD TAKEN OVER THE RESPONSIBILITY OF DAY - TO - DAY MANAGEMENT AND HAD ALSO BROUGHT IN FINANCE AND EXPERTISE TO RUN THE PLANT HAD CLAIMED HIGHER SHARE OF REMUNERATION. THE TERMS AND CONDITI ONS WHICH HAVE BEEN AGREED TO BETWEEN THE PARTIES WERE ADMITTEDLY BEFORE GENERAL MEETING OF EACH OF THE SOCIETY, WHO IN TURN, AGREED TO THE SAME AND THE PARTNERSHIP SO CONSTITUTED. IN THE ABOVE SAID SCENARIO, IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT TA KING ANY RISKS AND HENCE, WAS NOT A PARTNER IN THE SAID PARTNERSHIP SO CONSTITUTED. THE FIRST DUTY OF THE ASSESSEE COOPERATIVE SOCIETY WAS TO LOOK ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 25 AFTER ITS MEMBERS AND BY WAY OF TAKING CARE OF SUGARCANE PRODUCED BY THEM. WHERE THE ASSESSEE SOCIETY CONST ITUTED OF 12982 MEMBERS , THEN IT WAS INCUMBENT UPON IT TO UTILIZE THE SUGARCANE PRODUCED BY ITS MEMBERS AND ALSO BY THE NON - MEMBERS OF THE AREA AND WHERE THE ASSESSEE WAS OWNING A FULL - FLEDGED SUGARCANE PROCESSING FACTORY, WHICH WAS RUNNING INTO LOSSES, IT TOOK A DECISION TO RUN ITS SUGAR PLANT MORE EFFICIENTLY AND PROFITABLY BY INFUSING WORKING PARTNER WHO WAS NOT ONLY BRING IN ITS FINANCE BUT ALSO EXPERTISE FOR RUNNING DAY - TO - DAY OPERATIONS OF SUGAR PLANT . THE CONTRIBUTION OF THE ASSESSEE BESIDE S THE SUG ARCANE I.E. RAW MATERIAL FOR RUNNING THE SUGAR PLANT, TOTAL INFRASTRUCTURE OF THE SUGAR FACTORY I.E. THE LAND ON WHICH IT WAS SITUATED ALONG WITH PLANT & MACHINERY AND OTHER ASSETS AND ALSO THE LICENSES, PERMITS GRANTED FOR RUNNING SUGAR FACTORY. FURTHER, THE ASSESSEE HAD ALSO PROVIDED ITS WORKFORCE WHICH REMAINED UNDER ITS CONTROL AND THE PAYMENT OF WORKFORCE WAS TO BE PAID BY THE ASSESSEE THOUGH U TILIZED AND REIMBURSED BY THE WORKING PARTNER. WHERE, IT WAS THE DUTY OF ASSESSEE TO PROVIDE SUGAR CANE, THEN IT TAKES OVER THE RISKS OF RUNNING OF SUGAR PLANT BY WAY OF PROVIDING SUGARCANE TIMELY AND ALSO THE RISK TO LOOK AFTER ITS MEMBERS WHOSE SUGARCANE IS PROVIDED TO THE SUGAR PLANT. FURTHER, THE RISK WAS TAKEN OVER BY THE ASSESSEE VIS - - VIS WORKING OF ITS W ORKFORCE WHO HAD TO RUN THE SUGAR PLANT IN ORDER TO CRUSH THE SUGARCANE, WHICH IN TURN, WOULD ENTITLE THE ASSESSEE TO ITS PART OF REMUNERATION. THE ASSESSEE BY WAY OF ENTERING INTO SUCH AN AGREEMENT HAS NOT ONLY LOOKED AFTER THE INTEREST OF ITS MEMBERS I. E. THE CANE GROWERS BUT HAS ALSO UNDERTAKEN TO PROVIDE CANE FOR RUNNING OF THE SUGAR PLAN AND ALSO PARTICIPATED IN THE FUNCTIONING OF PLANT THROUGH ITS WORKFORCE AND ALSO EFFICIENT RUNNING OF THE BUSINESS BY BEING PART OF THE MANAGEMENT OF THE SAID CONCERN . IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE HAS TAKEN OVER THE RISKS OF RUNNING ITS SUGAR PLANT BY WAY OF ENTERING INTO A PARTNERSHI P WITH ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 26 ANOTHER PARTNER, WHO SHALL BE A WORKING PARTNER, WE HOLD THAT THE ASSESSEE WAS E NGAGED IN THE CARRYING ON OF BUSINESS. THE REMUNERATION RECEIVED BY THE ASSESSEE MERITS TO BE ASSESSED AS HIS SHARE OF PROFITS UNDER THE HEAD INCOME FROM BUSINESS . WE FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN ASSESSING THE SAME AS INCOME FRO M OTHER SOURCES. WHERE THE ASSESSEE HAS TAKEN A BUSINESS DECISION TO RUN ITS SUGAR PLANT MORE EFFICIENTLY BY WAY OF ENTERING INTO SUCH AN AGREEMENT OF PARTNERSHIP, WE FIND THAT THE INCOME EARNED BY THE ASSESSEE IS ITS INCOME FROM BUSINESS. 22 . NOW, COMIN G TO THE OBJECTIONS RAISED BY THE AUTHORITIES BELOW AND ALSO BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE BEFORE US THAT THE ASSESSEE HAS ENTERED INTO A LEASE OF ITS SUGAR PLANT AND HENCE, THE INCOME IS TO BE ASSESSED AS INCOME FROM OTHER SOU RCES. IT IS NOT THE CASE OF MERE LEASE OF PLANT & MACHINERY , ALONG WITH LAND THE ASSESSEE HAS PASSED ON BUNDLE OF RIGHTS ALONG WITH PLANT . I T WAS RUNNING SUGAR PLANT FOR ITS MEMBERS WHO ARE CANE GROWERS IN ORDER TO LOOK AFTER THE INTEREST OF ITS MEMBERS AND IN ORDER TO RUN THE PLANT MORE EFFICIENTLY, THE DECISION TAKEN BY THE ASSESSEE CANNOT BE SAID TO BE A MERE LEASE OF PLANT & MACHINERY. THE RIGHTS AND OBLIGATIONS OF THE ASSESSEE ARE MUCH MORE THAN THE THOSE OF A PERSON WHO HAD LEASED OUT ITS ASSETS. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND AS PER OUR DECISION IN THE PARAS HEREINABOVE, WE FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN THIS REGARD. FURTHER, THE OBJECTION OF ASSESSING OFFICER AND CIT(A) WAS THAT THE WORKING PAR TNER HAD TREATED THE SAID REMUNERATION AS RENT TO THE ASSESSEE AND DEDUCTED TAX AT SOURCE AND HENCE CLAIM OF ASSESSEE WAS NOT CORRECT. A S HELD BY VARIOUS COURTS, IT IS THE DUTY OF ASSESSING OFFICER TO CORRECTLY DETERMINE THE NATURE OF RECEIPTS IN THE HAND S OF ASSESSEE AND MERE NOMENCLATURE OF RECEIPTS OR TREATMENT BY ANY OTHER PERSON CANNOT DETERMINE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 27 THE NATURE OF RECEIPTS TO BE ASSESSED IN THE HANDS OF RECIPIENT. MERELY BECAUSE, TDS HAS BEEN DEDUCTED BY THE SAID CONCERN UNDER THE HEAD INCOME FROM RENT D OES NOT DETERMINE THE NATURE OF RECEIPTS IN THE HANDS OF ASSESSEE. THE CELEBRITY DECISION OF HONBLE SUPREME COURT IN SHAMBHU INVESTMENT (P) LTD. VS. CIT (SUPRA) CLEARLY LAYS DOWN THE PRINCIPLE FOR ASSESSMENT OF INCOME DERIVED FROM LETTING WHETHER UNDER T HE HEAD INCOME FROM PROPERTY OR AS BUSINESS INCOME. WHERE THE INTENTION WAS ONLY TO LET OUT THE OPERATION OF PREMISES TO RESPECTIVE OCCUPANT, IT WAS HELD BY THE HONBLE HIGH COURT OF CALCUTTA IN CIT VS. SHAMBHU INVESTMENT (P.) LTD. (SUPRA) THAT THE INCO ME DERIVED THEREFROM WAS ASSESSABLE AS INCOME FROM PROPERTY AND NOT AS BUSINESS INCOME , BUT WHERE THE INTENTION WAS TO EXPLOIT IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES, THEN IT MUST BE HELD AS BUSINESS INCOME. THE HONBLE SUPREME COURT U PHELD THE PRINCIPLE APPLIED BY THE HONBLE HIGH COURT. APPLYING THE AFORESAID DECISION TO THE FACTS OF THE PRESENT CASE , WE HOLD THAT SINCE THE ASSESSEE HAS EXPLOITED ITS SUGAR PLANT BY WAY OF A COMMERCIAL ACTIVITY OF RUNNING THE SAME ALONG WITH THE INCOM ING PARTNER, THEN THE INCOME SO EARNED IS TO BE ASSESSED AS INCOME FROM BUSINESS . 2 3 . NOW, COMING TO VARIOUS CASE LAWS RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. IT MAY BE POINTED OUT THAT DURING THE COURSE OF HEARING ITSEL F, IT WAS POINTED TO HIM THAT THE POINT OF DIFFERENCE IN ALL THE RELIANCES PLACED UPON BY HIM WAS THAT THESE WERE THE CASES OF LEASE AGREEMENT, WHEREAS IN THE PRESENT CASE, IT IS THE CASE OF PARTNERSHIP DEED. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS ALSO POINTED OUT THAT THE FACTS IN THE SAID CASES RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ARE DISTINGUISHABLE AND ARE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. WE HOLD THAT THE RATIO S LAID DOWN ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 28 BY THE SAID D ECISIONS ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE BECAUSE OF DISTINGUISHING FACTS. 2 4 . ONE ANOTHER ASPECT TO BE NOTED IN THE PRESENT CASE IS THAT THE ASSESSEE HAD FAILED TO FILE THE COPY OF PARTNERSHIP DEED BEFORE THE ASSESSING OFFICER. HOWE VER, THE SAID DEED OF PARTNERSHIP WAS FILED BEFORE THE CIT(A) AS ADDITIONAL EVIDENCE. THE CIT(A) IN THE FIRST INSTANCE HAS NOT ADMITTED THE SAME BUT LATER ON HAS DISCUSSED VARIOUS TERMS AND CONDITIONS OF PARTNERSHIP DEED TO COME TO A CONCLUSION THAT THE I NCOME IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. IN OTHER WORDS, THE CIT(A) HAS TAKEN NOTE OF THE PARTNERSHIP DEED EXECUTED BETWEEN THE PARTIES. MERELY BECAUSE THE DOCUMENT WAS NOT FILED BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEE DINGS BUT WAS FILED BEFORE THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS BY WAY OF ADDITIONAL EVIDENCE, THE PROVISIONS OF THE ACT PROVIDED THAT UNDER CERTAIN CIRCUMSTANCES, THE CIT(A) CAN ADMIT THE SAME AS EVIDENCE AND DECIDE THE ISSUE ACCORDINGLY. HERE THE CIT(A) HAS DECIDED THE ISSUE AFTER REFERRING TO CLAUSES OF THE PARTNERSHIP DEED AND ACCORDINGLY, WE HOLD THAT ONCE THE SAME HAS BEEN CONSIDERED BY THE CIT(A) ELABORATELY, THE SAME SHOULD HAVE BEEN ADMITTED AS ADDITIONAL EVIDENCE FOR DECIDING TH E ISSUE IN THE PRESENT APPEAL FOR DISPENSE OF JUSTICE. MERELY BECAUSE A DOCUMENT WAS NOT FILED BEFORE THE ASSESSING OFFICER, THE SAME CANNOT BE REJECTED ON SURMISES AND IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE CONSIDER THE ISSUE IN THE LIGHT OF DELIBERATIONS OF CIT(A) ON THE SAID SO CALLED ADDITIONAL EVIDENCE , SINCE THE POWERS OF CIT(A) ARE CO - TERMINUS WITH THE ASSESSING OFFICER . ACCORDINGLY, WE HOLD THAT THE INCOME RECEIVED BY THE ASSESSEE MERITS TO BE ASSESSED IN ITS HANDS AS INCOME FROM BUSINESS AND COROLLARY TO THE SAME , BROUGHT FORWARD LOSSES ON ACCOUNT OF DEPRECIATION WOULD FORM PART OF CURRENT DEPRECIATION IN THE HANDS OF ASSESSEE ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 29 AND THE SAME MERITS TO BE ADJUSTED AGAINST INCOME OF THE CURRENT YEAR AND IN CASE OF ANY BALANCE, ME RITS TO BE CARRIED FORWARD TO THE SUCCEEDING YEAR. ACCORDINGLY, WE DECIDE THE GROUNDS OF APPEAL NO.1 TO 3 IN FAVOUR OF THE ASSESSEE AND ALTERNATE PLEA RAISED BY THE ASSESSEE IS DISMISSED. 2 5 . NOW, COMING TO THE LEASE RENT RECEIVED BY THE ASSESSEE FROM M/ S. DECCAN BOTTLING & DISTILLING INDUSTRIES LTD. IN LINE WITH OUR ORDERS IN THE PARAS HEREINABOVE, WE HOLD THAT THE SAID INCOME IS TO BE TAXE D AS INCOME FROM BUSINESS AND NOT INCOME FROM OTHER SOURCES. 2 6 . VIDE GROUND OF APPEAL NO.6, THE ASSESSEE IS AGGRI EVED BY THE DENIAL OF SET OFF OF UNABSORBED DEPRECIATION FOR THE EARLIER YEARS AND WE ALLOW THIS GROUND OF APPEAL RAISED BY THE ASSESSEE. 2 7 . THE GROUND OF APPEAL NO.7 IS AGAINST DENIAL OF CIT(A) IN ADMITTING ADDITIONAL EVIDENCE RELATING TO PARTNERSHIP DE ED AND THE SAME IS ALSO ALLOWED. 2 8 . SIMILARLY, GROUND OF APPEAL NO.8 STANDS ALLOWED BECAUSE OF OUR ORDER OF ADMITTING THE PARTNERSHIP DEED AS GENUINE. 2 9 . THE ISSUE IN GROUND OF APPEAL NO.9 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE MADE BY TH E CIT(A) UNDER SECTION 43B OF THE ACT. THE PLEA OF THE ASSESSEE BEFORE US WAS THAT ONCE THE INCOME WAS ASSESSED FROM OTHER SOURCES, NO SUCH DISALLOWANCE COULD BE MADE UNDER SECTION 43B OF THE ACT. HOWEVER, SINCE THE INCOME IS ASSESSED AS INCOME FROM BUSI NESS, RELEVANT PROVISIONS OF SECTION 43B OF THE ACT ARE ATTRACTED. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE SAME AND DECIDE THE ISSUE. ITA NO. 1143 /PN/20 1 3 SA NO.100/PN/2015 S HR IRAM SAHAKARI SAKHAR KARKHANA LTD. 30 30 . THE ASSESSEE HAS ALSO MOVED STAY APPLICATION, WHICH IS DISMISSED IN VIEW OF OUR DECIDING THE PRESENT APPEA L. 31 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE STAY APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF APRIL , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 25 TH APRIL , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - II I, PUNE ; 4. / THE CIT - I II , PUNE ; 5. , , / DR A , ITA T, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE