Assistant Commissioner of Income-tax, V. Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd., Kolhapur

ITA 580/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9263 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 30-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUS HANT PHADNIS
• Keywords: Question of law
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO S . 578 TO 580 /P U N/20 1 6 / ASSESSMENT YEAR S : 2009 - 10 TO 20 1 1 - 1 2 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1, KOLHAPUR . / APPELLANT VS. KOLHAPUR ZILLA SAH. DUDH UTPADAK SANGH LTD., B - 1, MIDC, GOKUL SHIRGAON, KOLHAPUR . / RESPONDENT PAN: AAAAK0230D / APPELLANT BY : S HRI RAJEEV KUMAR, CIT / RESPONDENT BY : S HRI SUSHANT PHADNIS / DATE OF HEARING : 21 .0 2 .201 8 / DATE OF PRONOUNCEMENT: 27 . 02 .201 8 / ORDER PER SUSHMA CHOWLA, JM: ALL T HE THREE APPEAL S FILED BY THE REVENUE ARE AGAINST CONSOLIDATED ORDER OF CIT(A) - 1 , KOLHAPUR, DATED 2 8 . 0 1 .201 6 RELATING TO ASSESSMENT YEAR S 2009 - 10 TO 20 1 1 - 1 2 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . ALL THE APPEALS FILED BY THE REVENUE RELATING TO THE SAME ASSESSEE ON SIMILAR ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. IN ORDER TO ADJUDICATE THE 2 ITA NO S . 578 TO 580 /PUN/20 16 KOLHAPUR ZILLA SAH. DUDH UTPADAK SANGH LTD. ISSUES, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO.578/PUN/2016, RELATING TO ASSESSMENT YEAR 2009 - 10. 3. THE REVENUE IN I TA NO.578/PUN/2016, RELATING TO ASSESSMENT YEAR 2009 - 10 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.18,71,98,281/ - MA DE ON ACCOUNT OF DISTRIBUTION OF PROFIT IN THE GARB OF PAYMENT OF ADDITIONAL PRICE FOR PURCHASE OF MILK? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) WAS CORRECT IN APPRECIATING THE FACT THAT ADDITIONAL PURCHASE PRICE WAS PAID ONLY TO THE MEMBERS OF THE SOCIETY AFTER DETERMINATION OF PROFIT EARNED BY THE ASSESSEE SOCIETY AT THE END OF THE FINANCIAL YEAR, WHICH AMOUNTS TO DISTRIBUTION OF PROFITS IN TERMS OF BYE - LAWS OF THE ASSESSEE SOCIETY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LEARNED CIT(A) WAS RIGHT IN IGNORING THE PROVISIONS OF SECTION 43(1) OF THE I.T. ACT, 1961 WHICH LAYS DOWN THAT THE ACTUAL COST OF THE ASSETS TO THE ASSESSEE IS THE COST AS REDUCED BY THAT PORTION OF TH E COST, WHICH HAS BEEN MET DIRECTLY OR INDIRECTLY BY ANY OTHER PERSON OR AUTHORITY? 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDERS OF TRIBUNAL IN ASSESSEES OWN CASE AND ALSO BY THE ORDERS OF HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE. OUR ATTENTION WAS DRAWN TO THE ORDERS OF TRIBUNAL AND THE HONBLE BOMBAY HIGH COURT AS UNDER: - I) ITA NOS.401/PN/2005 TO 405/PN/2005, RELATING TO A SSESSMENT YEARS 1996 - 97 TO 2001 - 02, ORDER DATED 26.09.2005 II) CIT VS. (1) SOLAPUR DIST. CO - OP. MILK PRODUCERS AND PROCESS UNION LTD. (2) KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. (2009) 315 ITR 304 (BOM) III) CIT VS. KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. IN INCOME TAX APPEAL NO.1156 OF 2014 WITH INCOME TAX APPEAL NO.1157 OF 2014, JUDGMENT DATED 27.10.2016 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 3 ITA NO S . 578 TO 580 /PUN/20 16 KOLHAPUR ZILLA SAH. DUDH UTPADAK SANGH LTD. 6. W E HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS CO - OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROCESSING OF MILK AND MILK PRODUCTS . THE ASSESSEE WAS COLLECTING MILK FROM PRIMARY MILK SOCIET IES SPREAD OVER KOLHAPUR AND ADJOINING DISTRICTS. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80P OF THE ACT. THE ISSUE WHICH IS RAISED BY THE REVENUE VIDE GROUND OF APPEAL NO.1 IS ON ACCOUNT OF DISTRIBUTION OF PROFIT AFTER THE CLOSURE OF ACCOUNTING YEA R IN THE GARB OF PAYMENT OF ADDITIONAL PRICE FOR PURCHASE OF MILK. THE REVENUE IS AGGRIEVED BY DELETION OF ADDITION OF 18,71,98,281/ - IN ASSESSMENT YEAR 2009 - 10. THE SAID ISSUE HAS BEEN RAISED VIDE GROUNDS OF APPEAL NO.1 AND 2. THE NEXT ISSUE WHICH HAS BEEN RAISED IS AGAINST THE ORDER OF CIT(A) IN IGNORING THE PROVISIONS OF SECTION 43(1) OF THE ACT. 7. WE FIND THAT THE HONBLE BOMBAY HIGH COURT IN CIT VS. KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. (SUPRA) HAD DECIDED SIMILAR ISSUE RAISED BY THE REVENUE. THE ISSUES WHICH WERE RAISED BEFORE THE HONBLE HIGH COURT READ AS UNDER: - (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT THE PAYMENT OF RATE DIFFERENCE AFTER THE CLOS URE OF THE ACCOUNTING YEAR DO NOT AMOUNT TO DISTRIBUTION OF PROFIT, AS THE AMOUNT TO BE PAID WAS NOT OUT OF THE PROFIT ASCERTAINED AT THE ANNUAL GENERAL MEETING? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS JU STIFIED IN LAW IN HOLDING THAT THE EXPLANATION 10 TO SECTION 43(1) WAS PROSPECTIVE BEING SUBSTANTIVE LAW IN NATURE AND CONTENT DE HORS THE DECISION OF HON'BLE SUPREME COURT REPORTED IN 224 ITR 557? 8. THE DECISION ON QUESTION NO.(A) WAS AS UNDER: - 3. R EG. QUESTION (A): - (A) THE IMPUGNED ORDER OF THE TRIBUNAL DISMISSED THE REVENUES APPEAL BEFORE IT ON THE ISSUE RAISED HEREIN BY FOLLOWING THE DECISION OF THIS COURT IN CIT V/S. KOLAHPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. 315 ITR 304. 4 ITA NO S . 578 TO 580 /PUN/20 16 KOLHAPUR ZILLA SAH. DUDH UTPADAK SANGH LTD. (B) IT IS AN AGR EED POSITION BETWEEN THE PARTIES THAT THE ISSUE RAISED HEREIN STANDS CONCLUDED BY THE DECISION OF THIS COURT IN KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. (SUPRA) IN FAVOUR OF THE RESPONDENT - ASSESSEE. (C) IN THE ABOVE VIEW, THE QUESTION AS FRAMED DOE S NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW AS THE IMPUGNED ORDER HAS MERELY FOLLOWED THE BINDING DECISION OF THIS COURT. THUS, NOT ENTERTAINED. 9. REGARDING QUESTION (B), THE HONBLE HIGH COURT HELD AS UNDER: - 4. REG. QUESTION (B): - ( A ) THE IMPUGNED ORDER OF THE TRIBUNAL DISMISSED THE REVENUES APPEAL ON THE ISSUE RAISED HEREIN BY FOLLOWING ITS OWN ORDER IN THE RESPONDENT - ASSESSEES OWN CASE IN RESPECT OF THE ASSESSMENT YEARS 1999 - 2000, 2001 - 02, 2005 - 06 AND 2006 - 07. ( B ) MR. SINGH, LEARNED COUNSEL APPEARING FOR THE REVENUE IS UNABLE TO POINTS OUT WHETHER OR NOT ANY APPEAL ON THE ISSUE RAISED HEREIN, HAS BEEN FILED BY THE REVENUE. IN FACT, THE ORDER OF THIS COURT IN KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. (SUPRA), APPEARS TO BE AN AP PEAL BY THE REVENUE IN RESPECT OF THE VERY ORDERS WHICH ARE BEING RELIED UPON BY THE IMPUGNED ORDER (AS EVIDENT FROM PARAGRAPH 14 OF THE ORDER OF THE CIT(A)). HOWEVER, THE ISSUE RAISED HEREIN WAS NOT EVEN AN ISSUE RAISED THEREIN. ( C ) IN THE ABOVE VIEW, THE Q UESTION AS FRAMED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW AS THE IMPUGNED ORDER OF THE TRIBUNAL HAS MERELY FOLLOWED ITS OWN ORDERS FOR THE EARLIER ASSESSMENT YEARS, WHICH HAVE BEEN ACCEPTED BY THE REVENUE. THUS, NOT ENTERTAINED. 10. THE FI RST ISSUE WHICH ARISES IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER O F HONBLE BOMBAY HIGH COURT IN CIT VS. (1) SOLAPUR DIST. CO - OP. MILK PRODUCERS AND PROCESS UNION LTD. (2) KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD. (SUPRA), WHICH HAS BEEN APPLIED IN ASSESSMENT YEARS 2007 - 08 AND 2008 - 09. THE YEAR UNDER APPEAL BEFORE US IS ASSESSMENT YEAR 2009 - 10 AND FOLLOWING THE SAME PARITY OF REASONING, WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD AND DISMISS THE GROUNDS OF APPEAL NO.1 AND 2 RAISED BY TH E REVENUE. 11. SIMILARLY, THE ISSUE RAISED VIDE GROUND OF APPEAL NO.3 IS SQUARELY COVERED BY THE ORDERS OF HONBLE HIGH COURT IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 2007 - 08 AND 2008 - 09, WHEREIN THE HONBLE HIGH COURT HAS OBSERVED THAT THE REL IEF WAS GIVEN TO ASSESSEE IN EARLIER YEARS, AGAINST WHICH THE 5 ITA NO S . 578 TO 580 /PUN/20 16 KOLHAPUR ZILLA SAH. DUDH UTPADAK SANGH LTD. REVENUE HAD NOT FILED ANY GROUND, THOUGH IT HAD FILED THE APPEAL IN RESPECT OF SAID ORDERS OF TRIBUNAL. THE HONBLE HIGH COURT THUS, DISMISSED THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THI S REGARD. APPLYING THE SAID RATIO, WE DISMISS THE GROUND OF APPEAL NO.3 RAISED BY THE REVENUE. 1 2 . THE FACTS AND ISSUES IN ITA NOS.579/PUN/2016 & 580/PUN/2016 ARE IDENTICAL TO THE FACTS AND ISSUES IN ITA NO.578/PUN/2016 AND OUR DECISION IN ITA NO.578/PUN/2016 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS.579/PUN/2016 & 580/PUN/2016. 13. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 2 7 T H DAY OF FEBRUARY , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 2 7 T H FEBRUARY , 201 8 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 1 , KOLHAPUR ; 4. THE C IT - 1 , KOLHAPUR ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE