Bad Coop.Sugar Mills Ltd., V. DCIT, Spl.Range,

ITA 2147/DEL/2000

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6690 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-11-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 02-05-2000
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAJANAND MEENA CIR
• Assessee Lawyers: S K MUKHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH :G : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2519/DEL/2000 ASSESSMENT YEAR : 1995-96 THE JOINT COMMISSIONER OF INCOME-TAX, SPECIAL RANGE, KARNAL. VS. THE SAHABAD COOP. SUGAR MILLS LTD., SAHABAD. ITA NO.2147/DEL/2000 ASSESSMENT YEAR : 1995-96 THE SAHABAD COOP. SUGAR MILLS LTD., SAHABAD. DEPUTY COMMISSIONER OF INCOME- TAX, SPECIAL RANGE, KARNAL. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. MUKHI, ADVOCATE REVENUE BY : SHRI GAJANAND MEENA, CIR, DR ORDER PER BENCH: THE AFOREMENTIONED APPEALS WERE DISPOSED OF BY THIS TRIBUNAL VIDE ITS ORDER DATED 23 RD NOVEMBER, 2004. THE GROUND NO.1 IN ASSESSEES APPEAL WHEREBY THE ASSESSEE HAS CLAIMED EXEMPTION OF INCOME OF RS.7,44,02,512/- U/S 80P (2)(A)(III) WAS DEC IDED AGAINST THE ASSESSEE VIDE PARA 21 AND 22 OF THE SAID ORDER WHICH REA D AS UNDER:- 21. GROUND NO.1 THAT THE LEARNED CIT (A) WAS WHOLLY UNJUSTIFIED IN LAW AND ON FACTS IN UPHOLDING THE DENIAL OF EXEMPTION TO INCOME OF RS.7,44,02,512/ - U/S 80 - P(2)(A)(III) BEING ITA NO.2519/DEL/2000 ITA NO.2147/DEL/2000 2 RS.7,44,02,512/- U/S 80-P(2)(A)(III) BEING INCOME FROM MARKETING OF AGRICULTURE PRODUCE OF ITS MEMBERS. THE ISSUE IS COVERED BY THE PRINCIPLES LAID DOWN BY THE APEX COURT ON THE PROVISIONS OF SECTION 80-P(2)(A)(III). 22. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE POINT IN ISSUE IS DECIDED AGAINST THE ASSESSEE BY I TAT DELHI BENCH IN THE CASE OF THE SAME ASSESSEE FOR THE ASSESSMENT YEAR 1992-93 VIDE ORDER DATED 15.5.2002 IN ITA NO.4112/95. THE CIT (A) ALSO REJECTED THE CLAIM OF THE ASSESSEE BY FOLLOWING OTHER ORDERS OF EARLIER YEARS OF ITAT DELHI BENCH IN THE CASE OF THE SAME ASSESSEE. THE LE ARNED DEPARTMENTAL REPRESENTATIVE ALSO SUBMITTED THAT THE POINT IN ISSUE IS DECIDED AGAINST THE ASSESSEE BY PUNJAB AN D HARYANA HIGH COURT IN A CASE REPORTED IN 119 TAXMAN 7 95. CONSIDERING THIS SUBMISSION OF THE PARTIES, THE APPEAL OF THE ASSESSEE ON THIS GROUND IS DISMISSED BY FOLLOWING THE EARLIER ORDERS OF THE APPELLATE TRIBUNAL. 2. THE MATTER WAS CARRIED BY THE ASSESSEE IN AN APPEAL B EFORE HONBLE PUNJAB & HARYANA HIGH COURT AND VIDE ORDER DATED 12 TH OCTOBER, 2009, THE HONBLE HIGH COURT HAS ALLOWED TH E APPEAL FILED BY THE ASSESSEE IN ITA NO.27 OF 2004 (O&M). A COPY OF THE SAID ORDER IS PLACED ON OUR RECORD. THE SAID ORDER OF HONBLE HIG H COURT READS AS UNDER:- THIS ORDER WILL DISPOSE OF INCOME TAX APPEAL NOS. 27, 224 OF 2004, 93, 94, 165 AND 637 OF 2005 UNDER SECTION 2 60A OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT), RAISING COMM ON QUESTION OF APPLICABILITY OF SECTION 80P OF THE ACT TO THE MARKETING OF SUGAR BY MEMBERS OF THE COOPERATIVE SOCIE TY. LEARNED COUNSEL FOR THE PARTIES STATE THAT LEGAL ISSUE HA S SINCE BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY FULL BENCH OF THIS COURT IN B BB BUDHEWAL COOP. SUGAR MILLS LIMITED VS. CIT UDHEWAL COOP. SUGAR MILLS LIMITED VS. CIT UDHEWAL COOP. SUGAR MILLS LIMITED VS. CIT UDHEWAL COOP. SUGAR MILLS LIMITED VS. CIT, (2009) 315 ITR 351. IN VIEW OF THIS DEVELOPMENT, IMPUGNED ORDER OF THE TRIBUNAL IS LIABLE TO BE SET ASIDE AND THE MATTER IS REM ANDED FOR FRESH DECISION IN ACCORDANCE WITH LAW. ACCORDINGLY, THESE APPEALS ARE ALLOWED. THE IMPUGNE D ORDER OF THE TRIBUNAL IS SET ASIDE. THE MATTER IS REMA NDED TO THE TRIBUNAL FOR FRESH ORDER IN ACCORDANCE WITH LAW. TH E PARTIES ARE DIRECTED TO APPEAR BEFORE THE TRIBUNAL FOR FURTHER PROC EEDINGS ON DECEMBER 22, 2009. ITA NO.2519/DEL/2000 ITA NO.2147/DEL/2000 3 3. ACCORDINGLY, THESE APPEALS CAME UP TO BE FIXED AS P ER ORDER SHEET ENTRY DATED 30 TH NOVEMBER, 2009 AND WERE ADJOURNED FROM TIME TO TIME. LASTLY THESE APPEALS CAME UP FOR HEARING ON 16 TH NOVEMBER, 2010 WHEN BOTH THE PARTIES WERE HEARD ON THE ISSUE. 4. LD. AR HAS PLACED ON OUR RECORD THE ORDER OF THE CHANDIGARH BENCH OF THE TRIBUNAL DATED 22 ND DECEMBER, 2009 IN ITA NO.1184/CHD/93 IN THE CASE OF DCIT VS. THE MORINDA CO -OP. SUGAR MILLS LTD., WHEREIN GIVING EFFECT TO THE SIMILAR ORDER OF HONBLE PUNJAB & HARYANA HIGH COURT, THE ISSUE WAS DECIDED AS UNDER:- THIS APPEAL PREFERRED BY THE REVENUE, AGAINST THE OR DER OF THE CIT (APPEALS) DATED 26.09.1997 PERTAINING TO ASS ESSMENT YEAR 1995-96, HAS BEEN LISTED IN PURSUANCE TO THE JUDG EMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN ITA NO.27 OF 2004 DATED 12.10.2009. 2. BRIEFLY PUT, THE DISPUTE RELATES TO THE DENIAL OF DEDU CTION TO THE ASSESSEE U/S 80 (P) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE COOPERATIVE SOCIETY PURCHASES SUGARCANE FROM ITS MEMBERS AND PRODUCES SUGAR AND MO LASSES FROM THE SAME, WHICH IS THEN SOLD. ACCORDING TO THE AS SESSING OFFICER, SUGAR AND MOLASSES, WHICH ARE PRODUCED BY THE ASSESSEE AND THEREAFTER SOLD, ARE NOT THE AGRICULTURAL P RODUCE OF THE MEMBERS. ACCORDING TO THE ASSESSING OFFICER, VIDE ORDER OF ASSESSMENT DATED 24.02.1997 PASSED US 143 (3)OF THE IN COME TAX ACT, 1961 (IN SHORT, THE ACT), SUGARCANE IS THE AG RICULTURAL PRODUCE OF THE MEMBERS. THE ASSESSEE COOPERATIVE SOC IETY, THEREFORE, CAN BE SAID TO BE ENGAGED IN PRODUCTION AND SALE OF SOMETHING WHICH IS NOT AGRICULTURAL PRODUCE OF THE MEMB ERS. HE, THEREFORE, DENIED THE CLAIM OF DEDUCTION OF THE ASS ESSEE U/S 80P WITH REGARD TO THE PROFIT DERIVED FROM THE ACTIVITIES CARRIED OUT. THE CIT (APPEALS), VIDE HIS ORDER DATED 26.09.1 997 ALLOWED THE CLAIM OF THE ASSESSEE AGAINST WHICH THE REVENUE PRE FERRED APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ITS OR DER DATED 13.06.2003 ALLOWED APPEAL OF THE REVENUE AND APPROVE D THE STAND OF THE ASSESSING OFFICER. AGAINST SUCH DECISION OF THE TRIBUNAL, THE ASSESSEE PREFERRED APPEAL BEFORE THE HO NBLE PUNJAB & HARYANA HIGH COURT WHICH IS NOW DISPOSED OF BY WAY OF ORDER DATED 12.10.2009 (SUPRA). THE HONBLE HIGH CO URT HAS REMANDED THE ISSUE TO THE TRIBUNAL FOR PASSING A FRESH ORDER IN ACCORDANCE WITH LAW. ITA NO.2519/DEL/2000 ITA NO.2147/DEL/2000 4 3. BEFORE US, IT WAS A COMMON GROUND BETWEEN THE PARTIE S THAT THE ISSUE IN QUESTION STANDS DECIDED IN FAVOUR OF THE A SSESSEE BY THE FULL BENCH JUDGEMENT OF THE HONBLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF BUDHEWAL COOP. SUGAR MILLS LTD. V S. CIT, 315 ITR 351 (SC). IN FACT, AN OBSERVATION TO THE SAME EFFE CT HAS ALSO BEEN MADE BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN ITS JUDGEMENT DATED 12.10.2009 (SUPRA) IN ASSESSEES OWN CASE. 4. RESPECTFULLY FOLLOWING THE AUTHORITATIVE PRONOUNCEMEN T OF THE HONBLE JURISDICTIONAL HIGH COURT, THE STAND OF THE A SSESSEE IS UPHELD AND ACCORDINGLY, THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. 5. DECISION PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 22.12.2009. 5. WE HAVE HEARD BOTH THE PARTIES. THE ONLY ISSUE ARI SES IN THE PRESENT APPEALS FOR CONSIDERATION OF THE TRIBUNAL AFTE R THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF T HE ASSESSEE IS REGARDING GRANT OF DEDUCTION U/S 80-P AS ON NONE OF THE OTHER ISSUES THE APPELLANTS OR THE RESPONDENTS HAVE FILED THE APPEA L BEFORE THE HONBLE HIGH COURT. THE ISSUE HAS ALREADY BEEN DECIDE D IN FAVOUR OF THE ASSESSEE CONSIDERING THE AFOREMENTIONED FULL BENCH D ECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF BUDHEWAL COOP. SUGAR MILLS LTD. VS. CIT 315 ITR 351 (P&H). THEREFORE, TH E COORDINATE CHANDIGARH BENCH HAS DECIDED THE SAID ISSUE IN FAVOUR O F THE ASSESSEE BY DISMISSING THE DEPARTMENTAL APPEAL ON THIS ISSUE. RESP ECTFULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL, WE DECIDE THIS GROUND I.E., GROUND NO.1 RAISED BY THE ASSESSEE IN FAVOU R OF THE ASSESSEE AND GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED. 6. ON ALL OTHER ISSUES, AS ALREADY STATED, THE ORDER OF THE TRIBUNAL WILL REMAIN THE SAME AND THIS ORDER IS BEING PASSED TO G IVE EFFECT TO THE FINDINGS RECORDED BY HONBLE HIGH COURT. ITA NO.2519/DEL/2000 ITA NO.2147/DEL/2000 5 7. IN THE RESULT, BOTH THE CROSS APPEALS ARE ALLOWED FO R STATISTICAL PURPOSES AS MENTIONED IN THE AFOREMENTIONED ORDER OF T HE TRIBUNAL DATED 23 RD NOVEMBER, 2004 PASSED IN THE IMPUGNED APPEALS. THE ORDER PRONOUNCED IN THE OPEN COURT ON 19.11.20 10. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 19.11.2010. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES