Assistant Commissioner of Income-tax, V. Shri Vridheshwar Sahakari Sakhar Karkhana Ltd., Ahmednagar

ITA 1226/PUN/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1539 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 05-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: RIYA SHAH
• Keywords: Business expenditure; Tax effect
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1226/PUN/2014 / ASSESSMENT YEAR : 2009-10 THE ASST. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR. . / APPELLANT V/S SHRI VIRDHESHWAR SAHAKARI SAKHAR KARKHANA LIMITED, AT POST ADINATHNAGAR 414 505, TAL. PATHARDI, DIST. AHMEDNAGAR. PAN : AABCV0782E. . / RESPONDENT ASSESSEE BY : MS. RIYA SHAH. REVENUE BY : SHRI S.B. PRASAD, CIT. PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF TH E CONSOLIDATED ORDER OF COMMISSIONER OF INCOME TAX (A) IT/ TP, PUNE DATED 11.03.2014 FOR THE ASSESSMENT YEARS 2008-0 9 TO 2010- 11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE SOCIETY STATED TO BE ENGAGE D IN THE BUSINESS OF MANUFACTURING AND SALE OF SUGAR AND ITS BY-PRO DUCTS. / DATE OF HEARING : 19.03.2019 / DATE OF PRONOUNCEMENT: 19.03.2019 2 ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 30 .09.2009 DECLARING TOTAL INCOME OF RS. NIL AFTER CLAIMING SET OFF OF UN ABSORBED LOSSES. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFT ER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 30.11.2011. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE CONSOLIDATED ORDER DT.11. 03.2014 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS R AISED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS.17 , 68 , 693/- MADE IN THE ASSESSMENT ON ACCOUNT OF DIFFERENCE BETWEEN THE MARKET PRICE OF S UGAR AND THE CONCESSIONAL PRICE AT WHICH SUGAR WAS SOLD/SUPPLIED TO THE CANE GROWERS WHEN, IN FACT ,THE DIFFERENCE WAS NOT AT AL L IN THE NATURE OF ANY BUSINESS EXPENDITURE, AND ,ON THE CONTRARY , RE PRESENTED DISTRIBUTION OF PROFIT . 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN FAILING TO APPRECIATE THAT CONCESSIONAL SALE EFFECTIVELY IN VOLVES AN EXPENDITURE, ALBEIT AN INDIRECT ONE, IN AS MUCH AS INSTEAD OF CREDITING THE CONCESSIONAL SALE . AMOUNT TO THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE COULD HAVE CREDITED THE GROSS SALES AND DE BITED THE AMOUNT OF CONCESSION IN WHICH EVENT THE EXPENDITURE REPRESENTED BY THE DEBIT WOULD HAVE DIRECTLY COME UNDER THE SWEEP OF SECTION 40A(2) . 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN DELETING THE ADDITION ON THE ISSUE OF CONCESSIONAL SALE OF SUGAR WITHOUT FOLLOWING GUIDELINES PRESCRIBED BY THE HON' BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS K R ISHNA SAHAKARI SAKHAR KARKHANA LTD IN CIVIL APPEAL NO 6949 OF 2012 VIDE O RDER DATED 25/09/2012. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE APP EAL OF THE REVENUE IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFEC T AND THEREFORE, THE APPEAL OF THE REVENUE BE DISMISSED. LD.D.R. D ID NOT OBJECT TO THE AFORESAID CONTENTION MADE BY THE LD.A.R. 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT(A) IN RESPECT OF THE RELIEF GIVEN BY HIM. A S PER THE RECENT ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CB DT) DATED 11.07.2018 (CIRCULAR NO. 3 OF 2018), NO DEPARTMENT A PPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTER EST, EXCEEDS RS.20 LAKHS AND IT FURTHER STATES THAT THE INST RUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS ALSO. IN T HE PRESENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITION W HICH IS IN DISPUTE, THE TAX EFFECT IS LESS THAN RS.20 LAKHS AND IN THE ABSENCE OF ANY MATERIAL PLACED ON RECORD BY THE REVENUE TO DEMONS TRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXCEPTIONS PROVIDED IN PARA 10 OF THE AFORESAID CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTIONS OF THE AFORES AID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT. WE THEREFORE HOLD THE PRESENT APPEAL OF RE VENUE TO BE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT AND ACCORDING LY DISMISS THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINIO N ON MERITS OF THE CASE. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN T O THE REVENUE TO SEEK REVIVAL OF THE APPEAL. THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 4 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19 TH DAY OF MARCH, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; DATED : 19 TH MARCH, 2019. YAMINI '#$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. THE CIT(A)-IT/TP, PUNE. THE CIT-I, PUNE. !,# ! , / DR, ITAT, A PUNE; &'(/ GUARD FILE. / BY ORDER // TRUE COPY // ) *+, - / SR. PRIVATE SECRETARY # ! , / ITAT, PUNE.