KARIA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD vs. COMMISSIONER OF INCOME-TAX

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ITR/339/1984HC GujaratGJHC24012004198401 February 2000Author: HONOURABLE DR. JUSTICE J.N.BHATT,HONOURABLE MR. JUSTICE C.K.BUCH3 pages
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What did the High Court hold?

The High Court disposed of the reference. Regarding Question 1, the assessee's counsel did not press it, so it was not decided on merits. For Question 2, the Court, relying on the Supreme Court decision in Arvind Mills v. C.I.T., 197 ITR 422, held that the betterment charges were of a capital nature and answered the question in the affirmative, against the assessee and in favour of the Revenue. For Question 3, the Court referred to its own earlier decision in C.I.T. v. Kaira District Coop. Milk Producers Union, 209 ITR 898, which also involved the same assessee, and held that the contributions under Section 69 of the Gujarat Rajya Co-op. Societies Act were not deductible. The question was answered in the negative, in favour of the assessee and against the Revenue. The reference was disposed of accordingly, with no order as to costs.

What were the facts?

The Income Tax Appellate Tribunal, Ahmedabad Bench 'B', referred three questions for the opinion of the High Court of Gujarat concerning the assessment year 1979-80. The assessee is Karia District Co-operative Milk Producers Union Ltd., and the revenue is the Commissioner of Income-tax. The questions pertained to the validity and limitation of an Income Tax Officer's order, the capital nature of betterment charges paid to Anand Municipal Corporation, and the deductibility of contributions made under Section 69 of the Gujarat Rajya Co-op. Societies Act. The High Court was presented with a statement of case by the Tribunal.

What were the issues?

The Tribunal referred three questions for the High Court's opinion: 1. Whether the Appellate Tribunal was right in holding that the order passed by the Income Tax Officer was according to law and not barred by limitation. 2. Whether the Appellate Tribunal was right in holding that betterment charges of Rs.13,070/- paid to Anand Municipal Corporation were of a capital nature. 3. Whether the Appellate Tribunal was right in holding that contributions made under Section 69 of the Gujarat Rajya Co-op. Societies Act were not deductible in the computation of total income. The assessee's counsel did not press Question 1 regarding limitation. For Questions 2 and 3, it was jointly submitted that they were covered by earlier decisions. The revenue's contentions are not explicitly recorded for any of the questions, other than impliedly supporting the Tribunal's findings that were being challenged by the assessee in the reference.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 339 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE J.N.BHATT and

MR.JUSTICE C.K.BUCH

============================================================ 1. Whether Reporters of Local Papers may be allowed : YES 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 -------------------------------------------------------------- KARIA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: MR JP SHAH for Petitioner MR BB NAIK WITH MR MANISH R BHATT for Respondent No. 1

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CORAM : MR.JUSTICE J.N.BHATT and MR.JUSTICE C.K.BUCH Date of decision: 01/02/2000

ORAL JUDGEMENT(Per J.N.Bhatt, J.)

The Income Tax Appellate Tribunal, Ahmedabad Bench 'B' has referred the following questions for our opinion in relation to the assessment year, 1979-80, in the light of the facts enumerated in statement of case by the Tribunal:

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the order passed by the Income Tax Officer 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 Appellate Tribunal was right in holding that betterment charges for a sum of Rs.13,070/- paid to Anand Municipal Corporation is expenditure of capital nature ?

(3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that contribution made as per the provisions of Section 69 of the Gujarat Rajya Co-op. Societies Act is not deductible in computation of total income ?"

It was submitted that in view of the relevant proposition of law, the question No.1 regarding the limitation is not pressed by the learned counsel for the applicant.

In so far as questions Nos.2 & 3 are concerned, since it is, jointly, submitted that both the questions are covered by the earlier decisions, we do not deem it expedient to go into the minute details of facts, which are, otherwise explicit in the statement of the case.

In so far as question No.2 is concerned, our attention is invited to a decision of the Hon'ble Supreme Court rendered in Arvind Mills v. C.I.T., 197 ITR 422. After having considered the said decision and the facts and circumstances, it is clear, that question No.2 is, squarely, covered by the law laid down by the Hon'ble Apex Court. Therefore, the question No.2 is required to be decided accordingly. In the circumstances, we answer, question No.2, in affirmative, against the assessee and in favour of the Revenue.

Next, it would take us to the consideration of question No.3 which pertains to contribution made as per the provisions of Section 69 of the Gujarat Rajya Coop. Societies Act. It was, rightly, pointed out that this question is also no longer res-integra. It has been directly and, substantially, covered by a decision recorded by us in C.I.T. v. Kaira District Coop. Milk Producers Union, 209 ITR 898. It was also a case of the same assessee. We find no justification to make a departure. We, therefore, answer question No.3 in the negative, in favour of the assessee and against the revenue.

This reference stands disposed of accordingly, with no order as to costs.

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