Shri Vithal Sahakari Sakhar Karkhana Ltd, Solapur V. Assistant Commissioner of Income-tax, Circle - 1, Solapur

ITA 2266/PUN/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2128 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 28-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM ITA NO.2266/PUN/2017 / ASSESSMENT YEAR : 2008-09 SHRI VITHAL SAHAKARI SAKHAR KARKHANA LTD., A/P. VENUNAGAR, GURUSALE TAL. PANDHARPUR, DIST. SOLAPUR. PAN : AAAAS3892H. . / APPELLANT V/S THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1, SOLAPUR. . / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI DEEPAK GARG. / DATE OF HEARING : 17.06.2021 / DATE OF PRONOUNCEMENT : 24.06.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE CO-OPERATIVE SOCIE TY DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 7, PUNE DATED 04.07.2017 FOR THE ASSESSMENT YEAR 2008-09. 2. THE APPELLANT RAISED THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, PUNE HAS E RRED IN DISALLOWING AND ADDING BACK AN AMOUNT OF RS.69,86,180/- ON ACCOUNT OF SUGAR SOLD AT CONCESSIONAL RATE. 2 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER : THE APPELLANT IS A CO-OPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA CO-OPERATIVE SOCIETY ACT, 1950. IT IS ENGA GED INTO THE BUSINESS OF MANUFACTURING OF WHITE SUGAR. THE RETURN OF INCOME FOR A.Y. 2008-09 WAS FILED ON 29.09.2008. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY.COMMISSIONER OF INCOME TAX, CIRCLE 1, SOLAPUR (HEREINAFTER CALLED AS ASSESSING OFFICER) VIDE ORDER DATED 2 9.12.2010 PASSED UNDER SEC.143(3) OF THE ACT AT A TOTAL INCOME OF RS.30,96 ,66,651/-. WHILE DOING SO, THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS : (I) EXCESSIVE SUGAR CANE PRICE PAID TO ITS MEMBERS AT RS.30,67,29,113/-; (II) SALE OF SUGAR AT CONCESSIONAL RATE TO ITS MEMBERS AT RS.11,08,600/-; (III) VSI CONTRIBUTION AT RS.18,28,938/- 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, APPELLANT SOCIET Y HAS FILED AN APPEAL BEFORE THE LD.CIT(A) CHALLENGING THE ADDITION ON ACCOU NT OF SALE OF SUGAR AT CONCESSIONAL RATE TO ITS MEMBERS. 5. THE LD.CIT(A) AFTER REFERRING TO THE DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF CIT, BOMBAY VS. KRISHNA SAHAKARI SAK HAR KARKHANA LTD., REPORTED IN 211 TAXMANN.COM 109 (SC) ADDRESSED THE QUESTIONS RAISED BY THE HONBLE SUPREME COURT, SET ASIDE THE ISSUE TO T HE FILE OF ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS : 5.4.4. DUR I NG THE YEAR UNDER CONSIDERATION , THE RATE OF LEVY SUGAR PER QUINTA L FOR CENTRAL MAHARASHTRA AND EXCISE DUTY ON FREE SUG AR PER QUINTAL 3 ( AVERAGE RATES) , ARE NOT MENTIONED BY THE AO . THE AO HAS PRIMA FACIE CALCU L ATED CONCESS I ON G I VEN TO MEMBERS AT RS. 11,08,600/- AO IS DIRECTED TO OBTA I N RATE OF LEVY SUGAR AND EXCISE DUTY THEREON FOR RE LEVANT PERIOD AND C A L CULATE SUCH CONCESSION G I VEN TO MEMBERS. HOWEVER, IT NEEDS TO BE ASCERTA I NED I N THE FIRST PLACE AS TO WHETHER THE APPELLANT HAD C RUSHED SUGARCANE AT 50% CAPAC I TY AS COMPARED TO THE PREVIOUS SEASON . SUBSEQUENTLY, ON SATISFACTION OF THE ABOVE CONDITION , THE EXTENT OF SUCH EXCESS QUANTITY OF SUGAR SOLD I . E IN EXCESS OF 5 KG SUGAR PER MONTH , AT CONCESSIONAL RATE TO MEMBERS (I NCLUD I NG CANE SUPPLIERS WHO ARE MEMBERS) AND QUANTITY OF SUGAR, IF ANY, SOLD TO NON-MEMBERS , NEEDS TO BE ASCERTAINED AS IT IS PRIMA-FACIE DISALLOWABLE . THE ASSESSING OFFICER IS , ACCORDINGLY, DIRECTED TO QUANTIFY THE D I SALLOWANCE IF ANY, AR I S I NG OUT OF CONCESSIONAL SALE OF SUGAR IN ACCORDANCE WITH THE DIRECTIONS (A) TO ( C ) CONTAINED IN PARA 5.4.3 HEREINABOVE AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHALL BE RESTRICTED TO SUCH EXCESS SALES MADE . SUBJECT TO THESE DIRECTIONS, GROUND OF APPEAL IS TR EATED AS PARTLY ALLOWED. 6. WHEN THE APPEAL WAS CALLED ON, NONE APPEARED ON BEHA LF OF THE ASSESSEE. 7. WE HEARD THE LEARNED SR.D.R. AND AFTER HEARING THE LD. SR.D.R., WE PROCEED TO DISPOSE OF THE SAME. 8. THE ISSUE IN APPEAL RELATES TO THE ADDITION ON ACCOUN T OF SALE OF SUGAR AT CONCESSIONAL RATE TO ITS MEMBERS. THIS ISSUE REQUIRES TO BE A DJUDICATED ON THE TOUCHSTONE OF LAW LAID DOWN BY THE HONBLE SUPREME C OURT IN THE CASE OF CIT VS. KRISHNA SAHAKARI SAKHAR KARKHANA LTD. (SUPRA). T HE LD.CIT(A) REFERRING TO THE QUESTIONS RAISED BY THE HON'BLE SUPREME COURT IN THE SAID CASE CITED, HAS REMANDED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO ADDRESS THE QUESTIONS RAISED BY THE HON'BLE SUPREME CO URT IN THE SAID CASE. THE LD.CIT(A) HAS NO POWER TO SET ASIDE THE ISSUE TO THE FILE OF ASSESSING OFFICER. HOWEVER, THE POWER OF SET ASIDE CAN BE EXERCISED BY THE TRIBUNAL. THEREFORE, WE REMIT THE GROUND OF APPEAL TO THE ASSESSING OFFICER TO EXAMINE THE ALLOWABILITY OF THE SALE OF SUGAR AT CONCESSIONAL RATE TO ITS MEMBERS ON THE TOUCHSTONE OF LAW LAID DOWN BY THE HON'BLE SUPREME COUR T IN THE CASE OF 4 CIT VS. KRISHNA SAHAKARI SAKHAR KARKHANA LTD. (SUPRA). A CCORDINGLY, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 24 TH DAY OF JUNE, 2021. SD/- SD/- (S. S. VISWANETHRA RAVI) (IN TURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 24 TH JUNE, 2021. YAMINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-7, PUNE. 4. THE PR.CIT-6, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.