ITO, Ward 1(4), Kolhapur V. M/s. Ajara Shetkari Sahakari Sakhar Karkhana Ltd., Kolhapur

ITA 2142/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72356 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.2142/PUN/2012 (ASST. YEAR: 2008-09) ITO, WARD 1(4), KOLHAPUR APPELLANT VS. M/S. AJARA SHETKARI SAHAKARI SAKHAR KARKHANA LTD., A/P GAVASE, TAL AJARA, DIST. KOLHAPUR PAN:AAAAA0496R RESPONDENT APPELLANT BY : SHRI S.P. WALIMBE RESPONDENT BY : SHRI M.K. KULKARNI DATE OF HEARING : 06-11-2013 DATE OF PRONOUNCEMENT : 11-11-2013 ORDER PER R.S. PADVEKAR, JM: IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD. CIT(A), KOLHAPUR DATED 09-08-2012 FOR THE A.Y. 2008-09. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS; 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF SALE OF SUGAR AT CONCESSIONAL RATE TO THE MEMBERS R ELYING UPON THE DECISION OF HONBLE ITAT, PUNE IN THE CASE OF S HRI. CHHATRAPATI SHAHU SSK LTD., KAGAL, DIST-KOLHAPUR, IN ITA NO.192 5/PN/90 AND ON CIRCULAR NO.117 OF CBDT? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE D ECISION RENDERED 2 BY THE HONBLE ITAT IN THE CASE OF SHRI CHHATRAPATI SHAHU SSK LTD., KAGAL, DIST.-KOLHAPUR HAS NOT BEEN ACCEPTED B Y THE DEPT AND ON THE ISSUE SLP IS PENDING BEFORE THE HONBLE S.C. ? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN RELYING UPON CIRCULAR NO.117 OF CBDT WHICH IS ISSUED IN THE CASE OF A CONSUMER CO-OP. ST ORE IN RESPECT OF CLAIM OF DEDUCTION ON REBATE ALLOWED TO THE CUST OMERS ON PURCHASE MADE FROM STORES, WHEREAS THE INSTANT CASE INVOLVES CONCESSION ON SALE PRICE OF SUGAR MANUFACTURED BY T HE ASSESSEE, WHICH WOULD LEAD TO INCURRING OF LOSSES BY THE ASSE SSEE AS AGAINST INCREASE OF SALE IN THE CASE OF CONSUMER CO-OPERATI VE SOCIETY? 2. THE BRIEFLY STATED FACTS ARE AS UNDER. THE ASSE SSEE IS A CO-OPERATIVE SOCIETY WHICH IS IN THE MANUFACTURE AND SALE OF SUG AR AND ITS BY-PRODUCTS. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND A SSESSMENT HAS BEEN COMPLETED U/S.143(3) OF THE I.T ACT. THE ASSESSING OFFICER MADE THE ADDITION OF RS.14,30,136/- WHICH WAS ON ACCOUNT OF SALE OF SUGAR AT CONCESSIONAL RATES. THE ASSESSEE CHALLENGED THE A DDITION BEFORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE ADDITION. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. THE AO HAD MADE THE SAID ADDITION IN RESPECT OF DIFFERENCE BET WEEN FAIR MARKET PRICE AND THE CONCESSIONAL PRICE AT WHICH SUGAR WAS SOLD TO ASSESSEES MEMBERS TO BE DISTRIBUTION OF PROFITS OF THE KARKHANA. BE FORE THE LD. CIT(A), THE DECISION OF THE HONBLE HIGH COURT, MUMBAI IN THE C ASE OF TERANA SHETKARI SAHAKARI SAKHAR KARKHANA LTD., DHOKI VS. CIT WAS CI TED STATING THAT THE DEPARTMENT HAD NOT PRESSED THIS ISSUE AT THE TIME O F HEARING WHICH IMPLIED THAT IT HAD BEEN ACCEPTED THE DECISION OF T HE LOWER AUTHORITY. THE AO REJECTED THE CONTENTION BY NOTING THAT IN THE CA SE OF TERANA SHETKARI SAHAKARI SAKHAR KARKHANA LTD., DHOKI VS. CIT NON-BU SINESS EXPENSES DISALLOWED BY THE AO WAS ALLOWED AS BUSINESS EXPENS ES BY THE TRIBUNAL, WHEREAS, IN THE ASSESSEES CASE THE CONCESSIONAL RA TES WAS NOTHING BUT ITS APPROPRIATION OF PROFITS. THE LD. CIT(A) RELIED ON THE DECISION OF ITAT, PUNE IN THE CASE OF SHRI. CHHATRAPATI SHAHU SSK LTD ., KAGAL, DIST-KOLHAPUR (ITA NO.1925/PN/90) AND THE CIRCULAR OF THE CBDT NO .117 (1974) 094 3 ITR (STAT)0001A AND ALLOWED THE CLAIM OF THE ASSESS EE. THE LD. COUNSEL WAS FAIR ENOUGH TO SUBMIT THAT IN THE CASE OF CIT V S. KRISHNA SAHAKARI SAKHAR KARKHANA LTD. & OTHERS (2012) 80 DTR 298 (SC ), ON AN IDENTICAL ISSUE THE MATTER BEEN SET ASIDE WITH A DIRECTION TO ASCERTAIN WHETHER THE AFORESAID PRACTICE OF SELLING THE SUGAR AT CONCESSI ONAL RATES TO THE MEMBERS HAS BECOME A PRACTICE AND CUSTOM IN THE CO- OPERATIVE SOCIETY INDUSTRY AND WHETHER ANY RESOLUTION HAS BEEN PASSED BY THE STATE GOVERNMENT SUPPORTING THIS PRACTICE AND TO CONSIDER ON WHAT BASIS THE QUANTITY OF SUGAR IS BEING FIXED FOR SALE TO FARMER S / CANE GROWERS / MEMBERS EACH YEAR ON MONTH TO MONTH BASIS APART FRO M THE VALUE. 4. AS THE ISSUE BEFORE US IS AN IDENTICAL EVEN ON F ACTS WHICH WAS BEFORE THE HONBLE SUPREME COURT IN THE CASE OF KRISHNA SA HAKARI SAKHAR KARKHANA LTD. & OTHERS (SUPRA), WE THEREFORE, CONSI DER IT FIT TO RESTORE THE ISSUE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE S AME IN DE NOVA AFTER CONSIDERING THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF KRISHNA SAHAKARI SAKHAR KARKHANA LTD. & OTHERS (SUP RA). NEEDLESS TO SAY LD. CIT(A) SHOULD GIVE AN OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) A ND RESTORE THE MATTER BACK TO THE FILE OF THE CIT(A) IN THE LIGHT OF ABOV E DIRECTIONS. 5. IN THE RESULT, REVENUE APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 11 TH DAY OF NOVEMBER, 2013. SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED 11 TH NOVEMBER, 2013 GCVSR 4 COPY TO:- 1) DEPARTMENT, 2) ASSESSEE 3) THE CIT(A), KOLHAPUR 4) THE DR, B BENCH, I.T.A.T., PUNE 5) GUARD FILE //TRUE COPY// BY ORDER SR. PRIVATE SECRETARY ITAT PUNE BENCHES, PUNE