Deputy Commissioner of Income-tax, V. Baramati Taluka Sahakari Dudh Utpadak Sangh,

ITA 1947/PUN/2013

• Counselvise Citation: 194724514 RSA 2013
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1947/PN/2013 (ASSESSMENT YEAR : 2010-11) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE. . APPELLANT VS. BARAMATI TALUKA SAHAKARI DUDH UTPADAK SANGH, AT POST BARAMATI, DIST. PUNE 411 302. PAN : AACAT1943N . RESPONDENT DEPARTMENT BY : SHRI B. C. MALAKAR ASSESSEE BY : SHRI PRAMOD SHINGTE DATE OF HEARING : 08-10-2014 DATE OF PRONOUNCEMENT : 08-10-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DA TED 28.08.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 12.12.2012 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2010-11. 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRO SSLY ERRED IN ALLOWING DEDUCTION OF THE AMOUNT PROVIDED BY THE ASSESSEE SOCIETY ON ACCOUNT OF RATE DIFFERENCE TOWARDS PURCH ASE PRICE OF MILK INSTEAD OF CONFIRMING THE ADDITION/DISALLOW ANCE MADE IN THE ASSESSMENT ON THIS SCORE. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRO SSLY ERRED IN HOLDING THAT THE PROVISION MADE BY THE ASSESSEE SOCIETY FOR PAYMENT TO THE MEMBER CO-OPERATIVE SOCIETIES OVER A ND ABOVE THE AGREED PURCHASE PRICE OF MILK IS NOT APPLICATIO N OF INCOME/DISTRIBUTION OF PROFITS. ITA NO.1947/PN/2013 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT THE ASSESSEE HAD NOT INCURRED ANY ASCERTAINED LIABILITY IN RESPECT OF THE IMPUGNE D PROVISION AND THUS THE SAME COULD UNDER NO CIRCUMSTANCES BE A LLOWED AS DEDUCTION U/S.37 OF THE INCOME-TAX ACT, 1961. 5. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) MAY BE VACATED AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 3. ALTHOUGH, THE REVENUE HAS RAISED MULTIPLE GROUND S OF APPEAL BUT THE SOLITARY ISSUE RELATES TO AN ADDITION OF RS.73,45,1 91/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROVISION MADE FOR MILK RATE DIFFERENCE PAYABLE TO MILK SUPPLYING SOCIETIES ON ACCOUNT OF PURCHASE OF MILK. 4. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT RESPOND ENT-ASSESSEE IS A CO- OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROCES SING OF COW MILK PROCURED FROM MEMBERS OF PRIMARY MILK CO-OPERATIVE SOCIETIES , STANDARDIZATION AND PASTEURIZATION OF MILK, PROCESSING OF TONED MILK, S ALE OF MILK, PRODUCTION AND SALE OF CATTLE FEED, PURCHASE AND SALE OF VETERINAR Y MEDICINES, PURCHASE AND SALE OF DAIRY EQUIPMENTS AND RUNNING OF PETROL PUMP , ETC.. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTED THA T ASSESSEE HAD DEBITED A SUM OF RS.73,45,191/- REPRESENTING A PROVISION FO R MILK RATE DIFFERENCE PAYABLE TO PRIMARY MILK SOCIETIES FROM WHOM ASSESSE E HAD PROCURED MILK FOR PROCESSING AND SALE THEREOF. THE ASSESSEE EXPLAINE D THAT THE DIFFERENTIAL AMOUNT WAS PAYABLE TO THE SOCIETIES @ 15 PAISE PER LITRE OF MILK PURCHASED DURING THE YEAR AS PER BOARDS RESOLUTION DATED 27. 03.2010. ON THIS BASIS, IT WAS EXPLAINED BY THE ASSESSEE THAT THE PROVISION RE PRESENTED AN ASCERTAINED LIABILITY FOR PAYMENT OF ADDITIONAL PRICE OF MILK W HICH PERTAINED TO THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER, HOWEVE R, DISAGREED WITH THE ASSESSEE AND DISALLOWED THE CLAIM FOLLOWING THE STA ND OF THE ASSESSING OFFICER IN THE PAST ASSESSMENT YEARS OF 1993-94 TO 1995-96, 1997-98 AND 1998-99 ON SIMILAR ISSUE. AS A RESULT, AN ADDITION OF RS.73,4 5,191/- WAS MADE TO THE RETURNED INCOME. ITA NO.1947/PN/2013 5. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE AS SESSEE BY NOTICING THAT IN THE EARLIER ASSESSMENT YEARS THE CLAIM OF THE AS SESSEE STOOD ALLOWED BY THE TRIBUNAL AND SUCH DECISION OF THE TRIBUNAL WAS ALSO ENDORSED BY THE HONBLE BOMBAY HIGH COURT IN THE ASSESSEES OWN CASE VIDE I TA (L) NO.1457 OF 2008. ACCORDINGLY, THE ADDITION OF RS.73,45,191/- MADE TO THE RETURNED INCOME WAS DELETED BY THE CIT(A). AGAINST THE AFORESAID DECIS ION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 6. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE H AS NOT DISPUTED THE ASSERTIONS OF THE CIT(A) THAT THE SIMILAR ISSUE IN THE ASSESSEES OWN CASE FOR EARLIER YEARS STANDS DECIDED IN FAVOUR OF THE ASSES SEE BY THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT. HOWEVER, THE LD. DEPART MENTAL REPRESENTATIVE SUBMITTED THAT THE DEPARTMENT HAS FILED A SPECIAL L EAVE PETITION (SLP) BEFORE THE HONBLE SUPREME COURT AGAINST THE ORDER OF THE HONBLE BOMBAY HIGH COURT WHICH IS STILL PENDING. 7. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE PRECEDENTS IN THE ASSESSEES OWN CASE BY WAY OF THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT, WHICH CONTINUES TO HOLD THE FIELD, THERE IS NO ERROR ON THE PART OF THE CIT(A) IN DELETING THE IMPUGNED ADDITION OF RS.73,4 5,191/- ON ACCOUNT OF DIFFERENCE IN FINAL MILK RATE PAYABLE TO THE PRIMAR Y MILK SOCIETIES. AS A CONSEQUENCE, THE ORDER OF THE CIT(A) IS HEREBY AFFI RMED AND THE APPEAL OF THE REVENUE IS DISMISSED. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING O N 08 TH OCTOBER, 2014. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 08 TH OCTOBER, 2014. SUJEET ITA NO.1947/PN/2013 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, PUNE; 4) THE CIT-I, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE