DISTRICT CO.OP.MILK PRODUCERS UNION LTD. vs. COMMISSIONER OF INCOME TAX

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ITR/250/1985HC GujaratGJHC24012379198520 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
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What did the High Court hold?

The High Court decided the referred questions. Question 1 was not pressed by the assessee and therefore was not answered. For Question 2, the Court followed the decision in CIT v. Kaira District Co-operative Milk Producers' Union Ltd., 247 ITR 314, and answered it in the negative, in favour of the assessee, holding that the contribution was deductible. For Question 3, following Arvind Mills Ltd. v. CIT, 197 ITR 422, the Court answered in the affirmative, in favour of the revenue, holding that the betterment charges were of a capital nature. For Question 4, the Court relied on CIT v. Gwalior Rayon Silk Mfg. Co. Ltd., 196 ITR 149, and answered in the affirmative, in favour of the revenue, holding that roads are part of 'Building' and not 'Plant', thus the deduction under Section 80T was not admissible. The reference was disposed of with no order as to costs.

What were the facts?

This case involves an Income Tax Reference No. 250 of 1985 before the High Court of Gujarat at Ahmedabad, arising from ITA No. 994/Ahd/84 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'. The assessee is the District Co.op. Milk Producers Union Ltd., and the respondent is the Commissioner of Income Tax. Four questions of law were referred to the High Court at the instance of the assessee. During the pendency of the reference, it was submitted that all remaining questions had been decided. Question 1 was not pressed by the assessee's advocate.

What were the issues?

The Tribunal had to decide four questions of law. The first question concerned whether the order passed by the Income Tax Officer (ITO) was according to law and not barred by limitation. The second question was whether a contribution made as per Section 69 of the Gujarat Co-operative Societies Act was deductible in computing total income. The third question asked if betterment charges of Rs. 13,016/- paid to Anand Municipal Corporation were of a capital nature. The fourth question was whether roads were part of 'Building' and not 'Plant', thus making a 40% deduction claimed under Section 80T inadmissible. The assessee's advocate did not press the first question. For the second question, the assessee relied on the decision in CIT v. Kaira District Co-operative Milk Producers' Union Ltd., 247 ITR 314. For the third question, the assessee relied on Arvind Mills Ltd. v. CIT, 197 ITR 422. For the fourth question, the revenue relied on CIT v. Gwalior Rayon Silk Mfg. Co. Ltd., 196 ITR 149.

Which sections of the Income-tax Act were involved?

Section 69,Section 80T,Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 250 of 1985

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- DISTRICT CO.OP.MILK PRODUCERS UNION LTD. Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: NOTICE SERVED for Petitioner MR BB NAIK for MR MANISH R BHATT for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 20/06/2001

ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

At the instance of the assessee, the following four questions of law arising out of I.T.A. No. 994/Ahd/84 have been referred to this Court under the provisions of sec. 256(1) of the Income-tax Act, 1961, by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'.

1 Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that order passed by the ITO is according to the provisions of law and not barred by the limitation?

2.

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that contribution made as per the provisions of sec. 69 of the Gujarat Co-operative Societies Act is not deductible in computation of total income?

3.

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that betterment charges amounting to Rs. 13,016/- paid to Anand Municipal Corporation is the expenditure of capital nature?

4.

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that roads is a part of 'Building' and not 'Plant' and therefore deduction of 40% as claimed u/s 80T is not admissible?

2.

Learned advocate Shri J.P. Shah has appeared for the applicant whereas learned advocate B.B. Naik has appeared for the respondent.

3.

At the time of hearing of this reference, learned advocate Shri Shah has not pressed for question no. 1 and therefore the said question is not being answered.

4.

The learned advocates have submitted that all the remaining questions, which have been referred to this Court, have been decided during the pendency of this reference.

5.

So far as the second question is concerned, it has been submitted that the said question has been answered in case of CIT v. Kaira District Co-operative Milk Producers' Union Ltd., 247 ITR 314. The question has been answered in the negative i.e. in favour of the assessee and against the revenue. Thus, we also answer the said question in the negative, i.e. in favour of the assessee and against the revenue.

6.

So far as the third question is concerned, it has been submitted that the said question has been answered in case of Arvind Mills Ltd. v. CIT, 197 ITR 422. In view of the said judgment, we answer the said question in the affirmative i.e. in favour of the revenue and against the assessee.

7.

So far as the fourth question is concerned, it has been covered by the judgment delivered in case of CIT v. Gwalior Rayon Silk Mfg. Co. Ltd., 196 ITR 149. In view of the said judgment, the question which has been referred to this Court is answered in the affirmative i.e.. for the revenue and against the assessee.

The reference thus stands disposed of with no order as to costs.

(A.R. Dave, J.)

(D.A. Mehta, J.) (hn)

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