M/SMORINDA COOP.SUGAR MILLS TLD. vs. DCIT SPEICAL RANGE CHANDIGARH

Q: Which sections of the Income-tax Act were involved?

Section 260A, Section 80-P(2)(a)(iii)

ITA/161/2001HC Punjab & HaryanaPHHC01042011200113 July 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal in favour of the assessee. The Court noted that the revenue's counsel fairly conceded that the matter was covered in favour of the assessee by a Full Bench judgment of the same Court in The Budhewal Co-op. Sugar Mills Ltd. v. Commissioner of Income-Tax, ITA No. 507 of 2006, decided on 22.5.2009. Consequently, the appeal was allowed in terms of this precedent. The specific findings on each of the substantial questions of law were not elaborated upon in this order, as the decision was based on the binding precedent. The operative direction was to allow the appeal, implying the relief sought by the assessee regarding the deduction under Section 80-P(2)(a)(iii) was granted.

What were the facts?

The assessee, M/s Morinda Cooperative Sugar Mills Ltd., filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal, Chandigarh (ITA No. 112/CHANDI/97) for the assessment year 1994-95. The appeal challenged the disallowance of deduction/exemption under Section 80-P(2)(a)(iii). The revenue was represented by the Deputy Commissioner of Income Tax. The High Court was to decide substantial questions of law concerning the sustainability of the orders and the character of sugar at the time of marketing.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the orders Annexures P-2 and P-3 are legally sustainable in the facts and circumstances of the case. 2. Whether the order disallowing the deduction/exemption under section 80-P(2)(a)(iii) is legally sustainable, being based on mere presumptions and surmises or a mere difference of opinion. 3. Whether at the time of marketing of sugar, it could be treated to retain the character of agricultural produce grown by the members of the Society, or if it represented a commercial commodity no longer having the character of agricultural produce. Assessee's contentions: The assessee argued that the disallowance of deduction under Section 80-P(2)(a)(iii) was unsustainable as it was based on presumptions and surmises. The core of the dispute revolved around whether the sugar processed by the cooperative society retained its character as agricultural produce. Revenue's contentions: The judgment records no specific contentions from the revenue's side regarding the legal arguments, but notes the revenue's representation by counsel.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80-P(2)(a)(iii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 13.7.2010 M/s Morinda Cooperative Sugar Mills Ltd. ....Appellant. Versus Deputy Commissioner of Income Tax ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Gorav Goel, Advocate for the appellant. Ms. Urvashi Dhugga, Advocate for the respondent. ADARSH KUMAR GOEL, J.

This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal, Chandigarh in ITA No. 112/CHANDI/97 relating to the assessment year 1994-95 proposing the following substantial questions of law:- i) Whether in the facts and circumstances of the case the orders Annexures P-2 and P-3 are legally sustainable? ii) Whether in the facts and circumstances of the case the order disallowing the deduction/ exemption under section 80-P(2)(a)(iii) is legally sustainable, the same being based on -2- mere presumptions and surmises and mere difference of opinion which cannot form the basis of adjudication? iii) Whether at the time of marketing of sugar, the same could be treated to retain the character of agricultural produce grown by members of the Society or that it represent a commercial commodity no longer having the character of agricultural produce, is a question of law to be decided by this Hon'ble Court?”

Learned counsel for the revenue fairly states that the matter is covered in favour of the assessee by the Full Bench judgment of this Court in The Budhewal Co-op. Sugar Mills Ltd. v. Commissioner of Income-Tax, ITA No. 507 of 2006 decided on 22.5.2009. 3. In view of the above, this appeal is allowed in terms of the above mentioned judgment. (ADARSH KUMAR GOEL) JUDGE July 13, 2010 (AJAY KUMAR MITTAL) gbs JUDGE

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