ACIT, Pune V. The Malegoan Sahakari Sakhar Karkhana Ltd., Pune

ITA 1472/PUN/2012

• Counselvise Citation: 147224514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAWAN
• Assessee Lawyers: R G NAHAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1472/PN/2012 (ASSESSMENT YEAR : 2008-09) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 7, PUNE . APPELLANT VS. THE MALEGAON SAHAKARI SAKHAR KARKHANA LTD., A/P SHIVNAGAR, BARAMATI, PUNE 413 116. PAN : AAATT2982L . RESPONDENT DEPARTMENT BY : MR. B. Y. CHAWAN ASSESSEE BY : MR. R. G. NAHAR DATE OF HEARING : 14-10-2013 DATE OF PRONOUNCEMENT : 25-10-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATE D 28.10.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 28.12.2010 PAS SED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF THE INCOME-TAX ACT , 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE SOLITARY GROUND OF APPEAL RA ISED BY THE REVENUE READS AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW. THE CIT(A) ERRED IN DELETING AN AMOUNT OF RS.1,97,03,42 6/- WHICH HAD BEEN DISALLOWED & ADDED BACK TO THE INCOME OF THE ASSESS EE BY THE A.O. ON ACCOUNT OF KHODKI CHARGES. 3. IN BRIEF, THE FACTS ARE THAT THE RESPONDENT-ASSE SSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF SUGAR AND ITS BY ITA NO.1472/PN/2012 A.Y. 2008-09 PRODUCTS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD DEBITED TO ITS MANUFACTURIN G, TRADING, PROFIT AND LOSS ACCOUNT AN EXPENDITURE OF RS.1,97,03,426/- UNDER TH E HEAD KHODKI CHARGES. BEFORE THE ASSESSING OFFICER, ASSESSEE EXPLAINED TH AT SUCH CHARGES ARE PAID TO THE CULTIVATORS OR FARM LABOURERS, AS PER THE DI RECTIVES GIVEN BY THE DIRECTOR OF SUGAR, AND COMMITTEE OF MINISTERS. THE ASSESSING OFFICER DISALLOWED THE SAID EXPENDITURE ON THE GROUND THAT SUCH PAYMENT WA S AN APPLICATION OF INCOME. ACCORDINGLY, THE AMOUNT OF RS.1,97,03,426/- WAS ADDED TO THE TOTAL INCOME. 4. IN APPEAL BEFORE THE CIT(A), ASSESSEE SUBMITTED THAT LEFT OVER PART OF THE SUGARCANE ROOT IN THE FIELD AFTER CUTTING, WHIC H WAS REQUIRED TO BE CLEANED FOR FRESH HARVESTING; THE FARMERS WERE PAID LABOUR CHARGES FOR CARRYING OUT THIS WORK, WHICH HAS BEEN CLAIMED AS KHODKI CHARGES; T HAT SUCH KHODKI PIECES HAVE MORE SUGAR CONTENT AND THE SAME WERE TAKEN BY THE SUGAR FACTORIES WHICH HELPED IN REALIZING MORE QUANTITY OF SUGAR. O N THE POINT OF LAW, THE ASSESSEE POINTED OUT THAT SUCH EXPENDITURE HAS BEEN HELD TO BE AN ALLOWABLE DEDUCTION BY THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. SHREE PANCHAGANGA SAHAKARI SAKHAR KARKHANA LTD., (2002) 2 54 ITR 572 (BOM.). 5. IN THE ABOVE BACKGROUND, THE CIT(A), FOLLOWING T HE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SHREE PANC HAGANGA SAHAKARI SAKHAR KARKHANA LTD. (SUPRA), ALLOWED THE CLAIM OF THE ASSESSEE. AGAINST THE AFORESAID, REVENUE IS IN APPEAL BEFORE US. 6. BEFORE US, THERE IS NO MATERIAL OR ANY OTHER COG ENT ARGUMENT BROUGHT OUT BY THE REVENUE TO CONTRADICT THE CONCLUSION DRA WN BY THE CIT(A), WHICH IS BASED ON THE JUDGEMENT OF THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF SHREE PANCHAGANGA SAHAKARI SAKHAR KARKHANA LTD. (SU PRA). THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT CONTINUES TO HOLD THE FIELD AS THERE IS NO ITA NO.1472/PN/2012 A.Y. 2008-09 CONTRARY DECISION BROUGHT OUT BY THE REVENUE. THERE FORE, FOLLOWING THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHREE PANCHAGANGA SAHAKARI SAKHAR KARKHANA LTD. (SUPRA), THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS.1,97,03,426/- RE PRESENTING KHODKI CHARGES IS HEREBY AFFIRMED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 25 TH OCTOBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE