The ACIT, Aurangabad V. Shri Sant Eknath Sahakari Sakhar Karkhana Ltd., Aurangabad

ITA 1461/PUN/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49736 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 22-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 1461/PN/09 (ASST. YEAR: 2006-07) ASSTT. COMMISSIONER OF INCOME-TAX, .. APPELLANT CIR. 1, AURANGABAD VS. SHRI SANT EKNATH SSK LTD., .. RESPONDENT TAL. PAITHAN, DIST. AURANGABAD APPELLANT BY : SHRI ABHAY DAMLE RESPONDENT BY : NONE ORDER PER D. KARUNAKARA RAO, A.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), AURANGABAD DA TED 14.9.2009 WHICH, IN TURN, HAS ARISEN FROM THE ORDER OF THE ASSESSING OF FICER DATED 8.12.2008 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT) , PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. THE GROUND NO. 1 RAISED BY THE REVENUE IN ITS AP PEAL RELATES TO THE DELETION OF THE DISALLOWANCE OF RS 2,93,07,608/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESSIVE AND UNREASONABLE SUGARCANE PRICE PAID TO MEMBERS AND NON-MEMBERS BY THE ASSESSEE CO-OPERATIVE SOCIET Y. 3. AFTER HEARING THE LEARNED DR AND GOING THROUGH T HE ORDERS OF THE AUTHORITIES, WE FIND THAT THIS GROUND IS COVERED IN FAVOUR OF THE ASSESSEE AND 2 AGAINST THE DEPARTMENT BY THE DECISION OF THE SPECI AL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. MANJARA SSK LTD. 91 ITD 361 (M UM) (SB). RESPECTFULLY FOLLOWING THE SAID DECISION, WE HOLD THAT THE CIT(A ) WAS JUSTIFIED IN DELETING THE SAID DISALLOWANCES IN QUESTION WHILE COMPUTING THE INCOME OF THE ASSESSEE. THIS GROUND IS THUS DECIDED AGAINST THE REVENUE. 4. THE GROUND NO. 2 RELATES TO THE DELETION OF THE ADDITION MADE BY THE ASSESSING OFFICER INSPECT OF THE CONTRIBUTION MADE BY THE ASSESSEE FOR THE VASANT DADA SUGAR INSTITUTE . 5. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF I.T.A.T. PUNE IN THE CASE OF SHRI PANCHGANGA SSK LTD. IN ITA NO. 491 AND 1365./PN/1991 FOR A.Y. 1989-90 AND 1984-85 DATED 20 -7-1994 WHEREIN IT HAS BEEN HELD THAT SUCH CONTRIBUTION IS ALLOWABLE AS DE DUCTION. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI PANCHGANGA SSK LTD (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSE SSEE AND AGAINST THE DEPARTMENT. THIS GROUND IS, THEREFORE, REJECTED. 6. THE GROUND NO. 3 RELATES TO INTEREST ON ADVANCES TO HARVESTING AND TRANSPORTING CONTRACTORS . 7. WE HAVE HEARD THE LD DR AND HAVE GONE THROUGH TH E ORDERS OF THE AUTHORITIES BELOW. 8. IT IS WELL KNOWN THAT THE CANE HARVESTING & TRAN SPORT IS CARRIED OUT BY THE SUGAR FACTORIES TO SCHEDULE FRESH CANE OF DESIRED Q UANTITY AND QUALITY. THIS INCREASES THE YIELD OF SUGAR FROM SUGARCANE. THE A DVANCES ARE MADE BY THE 3 SUGAR FACTORY TO THE CANE HARVESTING AND TRANSPORT CONTRACTORS IN THE COURSE OF CARRYING ON THEIR BUSINESS ACTIVITIES OF PURCHASING FRESH CANE OF DESIRED QUALITY AND QUANTITY. THEREFORE, WHATEVER ADVANCES MADE BY THE ASSESSEE TO HARVESTING AND TRANSPORT CONTRACTORS CAN BE SAID TO HAVE BEEN MADE ONLY FOR BUSINESS PURPOSES. THE DISALLOWANCE OF INTEREST ON THE AMOUNT OF ADVANCES TO THE HARVESTING AND TRANSPORT CONTRACTORS IS, THUS, NOT CALLED FOR. THEREFORE, THIS GROUND IS DECIDED AGAINST THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF APRIL, 2011. SD/- SD/- (I.C. SUDHIR) (D. KARUNAKA RA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 20 TH APRIL, 2011 B COPY TO:- 1) ASSESSEE 2) ACIT CIR. 1, AURANGABAD 3) CIT(A), AURANGABAD 4) CIT AURANGABAD 5) THE DR, A BENCH, ITAT., PUNE. BY ORDER TRUE COPY ASST. REGISTRAR, I.T.A.T., PUNE