COMMISSIONER OF INCOME TAX vs. MEHSANA DIST.CO-OP.MILK PRODUCER'S UNION LTD.

ITR/70/1996HC GujaratGJHC24021750199630 August 2006Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.S.GARG5 pages
AI SummaryDismissed

What were the facts?

The Revenue has filed three Income Tax References (ITR Nos. 70/1996, 133/1996, and 56/1999) before the High Court of Gujarat at Ahmedabad. These references arise from orders of the Income Tax Appellate Tribunal (ITAT) concerning the assessee, Mehsana District Cooperative Milk Producers Union Ltd. The disputes pertain to the deletion of additions made by the Assessing Officer, representing alleged additional price of milk. The assessment years involved are 1986-87, 1985-86, and 1988-89, with amounts in dispute being Rs. 8,86,59,662/-, Rs. 8,10,15,754/-, and Rs. 4,63,57,027/-, respectively. A similar issue for Assessment Year 1984-85 (Rs. 5,47,69,105/-) was previously referred to the High Court.

What did the High Court hold?

The High Court held that the questions referred to it were concluded between the parties due to a prior judgment of a Division Bench of the same court. In ITR No. 26 of 1993, concerning Assessment Year 1984-85, the High Court had reported in [2006] 282 I.T.R. 24 (Commissioner of Income-Tax vs. Mehsana District Co-operative Milk Producers Union Ltd.), held that the Tribunal was right in law in deleting the addition by way of disallowance of additional purchase price towards the purchase of milk, which was sanctioned by the Board of Directors on the last day of the accounting year. As the present references involved the same assessee and identical issues, the High Court was bound by its previous decision. Therefore, the questions referred to the court were answered against the interest of the Revenue. All three references were disposed of in line with the earlier judgment.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 8,86,59,662/- representing alleged additional price of milk on 31-3-1986 (for AY 1986-87)? 2. Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow the claim of Rs. 8,10,15,754/- representing additional price on milk (for AY 1985-86)? 3. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) deleting the addition to the extent of Rs. 4,63,57,027/- being the alleged additional price towards purchase of milk sanctioned on the last day of the accounting year (for AY 1988-89)? The Revenue contended that the Tribunal was not right in deleting the additions. The Assessee contended that the additions were wrongly made by the Assessing Officer. The judgment notes that for AY 1984-85, the Tribunal had agreed with the Assessee and directed deletion of the addition. The Tribunal relied on its prior order for subsequent years. The High Court had previously decided a similar issue for AY 1984-85 in favour of the Assessee.

Which sections of the Income-tax Act were involved?

Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/70/1996 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE NO. 70 OF 1996 With INCOME TAX REFERENCE NO. 133 OF 1996 With INCOME TAX REFERENCE NO. 56 OF 1999 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG

HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the Civil Judge? ========================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus MEHSANA DIST.CO-OP.MILK PRODUCERS UNION LTD.-Opponent(s) ========================================================= Appearance : MRS. MONA BHATT for MR. MANISH R. BHATT for Applicant(s). MR. MANISH J. SHAH for Opponent(s). ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG a

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