M/S MORINDA COOP SUGAR MILLS LTD vs. COMMISSIONER OF INCOME TAX

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ITA/27/2004HC Punjab & HaryanaPHHC01051414200412 October 2009Author: MR. JUSTICE GURDEV SINGH,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the legal issue concerning the applicability of Section 80P of the Income Tax Act, 1961, to the marketing of sugar by members of a cooperative society has been decided in favour of the assessee by a Full Bench of the same Court. This decision was rendered in the case of Budhewal Coop. Sugar Mills Limited v. CIT, (2009) 315 ITR 351. Consequently, the impugned order of the Tribunal was found to be liable to be set aside. The High Court allowed the appeals, set aside the Tribunal's order, and remanded the matter back to the Tribunal for a fresh decision in accordance with the law laid down by the Full Bench. The parties were directed to appear before the Tribunal on December 22, 2009, for further proceedings.

What were the facts?

The appeals before the High Court of Punjab and Haryana at Chandigarh involve M/s Morinda Cooperative Sugar Mills Limited (the appellant) and the Commissioner of Income Tax II, Chandigarh (the respondent). The assessment years are not explicitly stated for all appeals, but the core issue revolves around the applicability of Section 80P of the Income Tax Act, 1961, to the marketing of sugar by members of the Cooperative Society. The impugned orders are those of the Income Tax Appellate Tribunal (ITAT). The procedural history indicates that the High Court is considering these appeals under Section 260A of the Act.

What were the issues?

1. Whether the marketing of sugar by members of the Cooperative Society is eligible for deduction under Section 80P of the Income Tax Act, 1961? (Question of law) Assessee's contention: The assessee argues that the marketing of sugar by its members falls within the ambit of activities for which a cooperative society is eligible for deduction under Section 80P. They rely on the principle that such activities are integral to the cooperative nature of the society and its purpose of facilitating business for its members. Revenue's contention: The revenue's arguments are not explicitly recorded in the provided text. However, their position would typically be that the marketing activities do not qualify for the deduction under Section 80P, possibly arguing that it goes beyond the specified activities or that the society is not primarily engaged in such activities as defined by the Act.

Which sections of the Income-tax Act were involved?

Section 80P,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 12.10.2009 M/s Morinda Cooperative Sugar Mills Limited -----Appellant Vs. Commissioner of Income tax II, Chandigarh. ----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present:- Mr. M.R.Sharma, for the appellant in ITA Nos.27, 224 of 2004, 93 and 94 of 2005. Mr. Rajesh Garg, Advocate for the appellant in ITA Nos.637 of 2005 and 165 of 2005. Ms.Urvashi Dhugga, Advocate for the respondent In ITA Nos.27, 224 of 2004 and 94 and 165 of 2005. Mr. SK Mukhi, Advocate for the respondent In ITA No.165 of 2005. Adarsh Kumar Goel,J. This order will dispose of Income Tax Appeal Nos.27, 224 of 2004, 93, 94, 165 and 637 of 2005 under Section 260A of the Income Tax Act, 1961 (in short, ‘the Act’), raising common question of applicability of section 80P of the Act to the marketing of sugar by members of the Cooperative Society. Learned counsel for the parties state that legal issue has since been decided in favour of the assessee by Full Bench of this Court in Budhewal Coop. Sugar Mills Limited v. 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 remanded for fresh decision in accordance with law. Accordingly, these appeals are allowed. The Impugned order of the Tribunal is set aside. The matter is remanded to the Tribunal for fresh order in accordance with law. The parties are directed to appear before the Tribunal for further proceedings on December 22, 2009. (Adarsh Kumar Goel) Judge October 12, 2009 (Gurdev Singh) ‘gs’ Judge 2

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