ACIT, Sangli V. Hutatma Kisan Ahir SSK Ltd, Sangli

ITA 2350/PUN/2012

• Counselvise Citation: 235024514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-03-2014
• Assessment Year: misc
• Appeal Filed On: 29-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 2 350 /PN/20 1 2 ASSESSMENT YEAR : 200 9 - 10 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 2 , SANGLI VS. HUTATMA KISAN AHIR SAHAKARI SAKHAR KARKHANA LTD. WALWA, TAL - WALWA, DISTT. - SANGLI (APPELLANT) (RESPONDENT) PAN NO. AAAAH0391N APPELLANT BY: SHRI S.P. WALIMBE RESPONDENT BY: SHRI M.K. KULKARNI DATE OF HEARING : 04 - 03 - 20 14 DATE OF PRONOUNCEMENT : 10 - 0 3 - 2014 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL , THE REVENUE HAS CHALLENGED T HE IMPUGNED ORDER OF THE LD. CIT(A), KOLHAPUR DATED 0 3 - 09 - 2012 FOR THE A.Y. 200 9 - 10. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE 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 RELYING UPON THE DECISION OF HON'BLE ITAT, PUNE IN THE CASE OF SHR I. CHHATRAPATI SHAHU SSK LTD., KAGAL, DIST - KOLHAPUR, IN ITA NO. 1925/PN/90 AND ON CIRCULAR NO. 117 OF CBDT? 2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE DECISION RENDERED BY THE HON'BLE ITAT IN THE CASE OF SHRI CHHATRAPATI SHAHU SSK LTD., KAGAL, DIST. - KOLHAPUR HAS NOT BEEN ACCEPTED BY THE DEPT AND ON THE ISSUE SLP IS PENDING BEFORE THE HON'BLE S.C. ? 3 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERR ED IN RELYING UPON CIRCULAR NO. 117 OF CBDT 2 ITA NO. 2350 /PN/2012, HUTATMA KISAN AHIR SAHAKARI SAKHAR KARKHANA LTD., SANGLI WHICH IS ISSUED IN THE CASE OF A CONSUMER CO - OP. STORE IN RESPECT OF CLAIM OF DEDUCTION ON REBATE ALLOWED TO THE CUSTOMERS ON PURCHASE MADE FROM STORES, WHEREAS THE INSTANT CASE INVOLVES CONCESSION ON SALE PRICE OF SUGAR MANUFACTURED BY THE ASSESSEE, WHICH WOULD LEAD TO INCURRING OF LOSSES BY THE AS S ESSEE AS AGAINST INCREASE OF SALE IN THE CASE OF CONSUMER CO - OPERATIVE SOCIETY ? 2. THE ISSUE IS IN RESPECT OF SALE OF SUGAR AT CONCESSIONAL RATE TO THE MEMBERS. THE ASSESSEE IS A CO - OPERATIVE SOCIETY WHICH IS ENGAGED IN THE MANUFACTURING AND SALE OF SUGAR AND ITS BYE - PRODUCTS. THE RETURN FILED BY THE ASSESSEE FOR THE A.Y. 2009 - 10 WAS SELECTED FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE INCOME - T AX ACT. AS OBSERVED BY THE ASSESSING OFFICER THE ASSESSEE SOCIETY HAS SOLD/SUPPLIED SUGAR TO ITS MEMBERS AT CONCESSIONAL RATE. IN THE OPINION OF THE ASSESSING OFFICER SUPPLY OF SUGAR AT CONCESSIONAL RATE AS AGAINST THE PREVALENT MARKET PRICE IS NOTHING B UT AN APPROPRIATION OF PROFIT AND IN THE NATURE OF APPLICATION OF INCOME. THE ASSESSING OFFICER, THEREFORE, WORKED OUT THE DIFFERENCE BETWEEN THE FAIR MARKET PRICE AND THE CONCESSIONAL PRICE AT WHICH THE SUGAR WAS SOLD/SUPPLIED TO THE MEMBERS AND MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE TO THE EXTENT OF RS.1,55,72,671/ - . THE SAID ADDITION WAS DELETED BY THE LD. CIT(A). NOW THE REVENUE IS IN APPEAL BEFORE US. 3 . WE HAVE HEARD THE PARTIES. THE ISSUE IN THIS CASE IS WHETHER THE CIT(A) JUSTIFI ED IN DELETING THE ADDITION MADE ON ACCOUNT OF SALE OF SUGAR AT CONCESSIONAL RATE TO THE MEMBERS. WE FIND THAT THE IDENTICAL ISSUE HAS COME BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KRISHNA SSK LTD. AND OTHERS IN CIVIL APPEAL NO. 6950 OF 201 2 ETC. JUDGMENT DATED 25 - 09 - 2012 AND THE HON'BLE SUPREME COURT REMITTED THE MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR RE - CONSIDERATION BY GIVING THE FOLLOWING DIRECTIONS: 3 ITA NO. 2350 /PN/2012, HUTATMA KISAN AHIR SAHAKARI SAKHAR KARKHANA LTD., SANGLI THE QUESTION, WHETHER THE ABOVE DIFFERENCE BETWEEN THE FAIR MARKET PRICE AND TH E CONCESSIONAL PRICE SHOULD OR SHOULD NSOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE SOCIETY, NEEDS TO BE RE - LOOKED BY CIT(A). APART FROM THE AFORESAID QUESTION, CIT(A) WOULD TAKE INTO ACCOUNT, WHETHER THE ABOVE MENTIONED PRACTICE OF SELLING SUGAR AT C ONCESSIONAL RATE HAS BECOME THE PRACTICE OR CUSTOM IN THE IN THE CO - OPERATIVE SUGAR INDUSTRY? AND WHETHER ANY RESOLUTION HAS BEEN PASSED BY THE STATE GOVERNMENT SUPPORTING THE PRACTICE? THE CIT(A) WOULD ALSO CONSIDER ON WHAT BASIS THE QUANTITY OF THE FINA L PRODUCT, I.E. SUGAR, IS BEING FIXED FOR SALE OF FARMERS/CANE GROWERS/MEMBERS EACH YEAR ON MONTH TO - MONTH BASIS, APART FROM DIWALI? THERE ARE SOME OF THE QUESTIONS WHICH HAVE NOT BEEN ADDRESSED BY THE AUTHORITIES BELOW IN THE IMPUGNED ORDERS. THE CIT(A) WOULD BE ENTITLED TO LOOK INTO THE ACCOUNTS AND VERIFY THE BASIS FOR SALE OF SUGAR AT CONCESSIONAL PRICE ON MONTH - TO - MONTH BASIS WE THEREFORE, KEEP ALL QUESTIONS OF LAW AND FACTS OPEN. NEEDLESS TO ADD, THE CIT(A) WOULD GIVE LIBERTY TO BOTH THE SIDES TO PRODUCE RELEVANT DOCUMENTS. FOR THE ABOVE REASONS, WE REMIT THE CASES TO CIT(A) TO DE - NOVO CONSIDER THE MATTER. 4 . IN THE PRESENT CASE ALSO THE MATERIAL AND RELEVANT FACTS ARE NOT ON RECORD AS IN THE CASE OF KRISHNA SSK LTD. AND OTHERS (SUPRA). WE, T HEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF KRISHNA SSK LTD. AND OTHERS (SUPRA) RESTORE THE ISSUE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IN THE LIGHT OF ABOVE DIRECTIONS GIVEN BY THE HON'BLE SUPREME C OURT IN THE CASE OF KRISHNA SSK LTD. AND OTHERS (SUPRA). ACCORDINGLY, THE GROUNDS TAKEN BY THE REVENUE ARE ALLOWED FOR THE STATISTICAL PURPOSES. 4 ITA NO. 2350 /PN/2012, HUTATMA KISAN AHIR SAHAKARI SAKHAR KARKHANA LTD., SANGLI 5 . IN THE RESULT, THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10 - 0 3 - 201 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 10 TH MARCH, 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A), KOLHAPUR 4 THE CIT, KOLHAP UR 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE