THE COMMISSIONE OF INCOME TAX vs. SHRI TULJABHAVANI S S K LTD.

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TA/14/2002HC BombayHCBM03016477200109 February 2018Author: HON'BLE SHRI JUSTICE S V GANGAPURWALA,HON'BLE SHRI JUSTICE ARUN M. DHAVALE2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that it would be necessary to remit the matter back to the Income Tax Appellate Tribunal for considering the aspects concerning Cane Development Fund, Area Development Fund, Small Savings, Hutment Fund, C.M. Fund, and Mewad Relief Fund afresh. This decision was made in light of the Supreme Court's judgment in Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. Commissioner of Income Tax. The Apex Court had ruled that Cane Development Fund amounts are to be treated as income, with no claim for deduction. For Area Development Fund, the Apex Court had directed the Tribunal to consider the assessee's utilization of the funds. The High Court set aside the impugned judgment and remitted the matter to the Tribunal for a fresh decision based on these observations. The High Court did not decide the merits of the additions themselves but ordered a remand for reconsideration.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax (the Revenue) against an order of the Income Tax Appellate Tribunal (the Tribunal). The assessee is Shri Tuljabhavani S.S.K. Ltd. The appeal concerns assessment year(s) not explicitly stated but implied to be prior to the High Court's judgment. The Revenue is challenging the Tribunal's deletion of additions made on account of various funds: Cane Development Fund, Area Development Fund, Small Savings, Hutment Fund, C.M. Fund, and Mewad Relief Fund. The High Court notes that the respondent (assessee) was served but did not appear, and had also not appeared on the previous occasion. The High Court had previously ruled in favour of the assessee in a similar case, CIT Vs. Chhatrapati Sahakari Sakhar Karkhana Ltd. The Revenue relies on a Supreme Court judgment in Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. Commissioner of Income Tax.

What were the issues?

1. Whether the Tribunal was right in deleting the additions made on account of Cane Development Fund, Area Development Fund, Small Savings, Hutment Fund, C.M. Fund, Mewad Relief Fund? (Question of law). Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, it notes that the Tribunal had decided these issues in favour of the assessee based on the High Court's judgment in CIT Vs. Chhatrapati Sahakari Sakhar Karkhana Ltd. (2000) 245 ITR 498. Revenue's contentions: The Revenue relies on the Supreme Court's judgment in Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. Commissioner of Income Tax, Kolhapur and ors. (2004) 12 SCC 1. The Revenue argues that the Apex Court held that amounts collected by the society towards Cane Development Fund should be treated as income of the assessee, and no deduction should be allowed. For Area Development Fund, the Revenue points out that the Apex Court remitted the matters to the Tribunal to consider the assessee's case for utilizing the amount for its intended purpose.

Which sections of the Income-tax Act were involved?

None explicitly mentioned in the provided text, other than implied by the nature of the funds and additions.

AI-generated summary — verify with the full judgment below

I.T.Appeal No.14/2002

IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD INCOME TAX APPEAL NO. 14 OF 2002 The Commissioner of Income Tax, Aayakar Bhavan, Cantonment, Near Holy Cross English School, Aurangabad .. Appellant Versus Shri Tuljabhavani S.S.K. Ltd., through its Managing Director, Naldurg, Taluka Naldurg, District Osmanabad ..Respondent Mr Alok Sharma, Standing Counsel for appellant Respondent served

CORAM : S.V. GANGAPURWALA & A.M. DHAVALE, JJ

DATE : 9th February 2018 ORAL JUDGMENT (Per S.V. Gangapurwala, J.) 1. We have heard Mr Sharma, learned Counsel for appellant. Though the respondent is served, none appears. On last occasion also none appeared for the respondent. The following question of law arise : “ Whether the Tribunal was right in deleting the additions made on account of Cane Development Fund, Area Development Fund, Small Savings, Hutment Fund, C.M. Fund, Mewad Relief Fund ?” 2. The Tribunal has decided these issues in favour of assessee in view of the judgment of the High Court in case of CIT Vs. Chhatrapati Sahakari Sakhar Karkhana Ltd., reported in (2000) 245 ITR 498.

I.T.Appeal No.14/2002

3.

Mr Sharma, learned Counsel refers to the judgment of the Apex Court in a case of Siddheshwar Sahakari Sakhar Karkhana Ltd., Vs. Commissioner of Income Tax, Kolhapur and ors., reported in

(2004) 12 SCC 1. 4. The Apex Court in the aforesaid judgment has held that amounts collected by the society towards Cane Development Fund shall be treated as income of the assessee and no claim for deduction shall be entertained and decided by the Tribunal. As regards Area Development Fund, the matters were remitted to the Tribunal. The Tribunal has to consider the case put forth by the assessee of utilising the said amount for the purpose for which it was collected. 5. Considering the judgment of the Apex Court in the case of Siddheshwar S.S.K. Ltd., Vs. Commissioner of Income Tax (supra), it would be necessary to remit the matter back to the Tribunal for considering the aspects in respect of Cane Development Fund, Area Development Fund, Small Savings, Hutment Fund, C.M. Fund and Mewad Relief Fund, afresh in light of the judgment of Apex Court in case of Siddheshwar S.S.K. Ltd., Vs. Commissioner of Income Tax (Supra). 6. The impugned judgment is set aside. The matter is remitted to the Tribunal for deciding afresh as per observations made above. 7. Appeal is accordingly partly allowed. No costs. ( A.M. DHAVALE, J.) ( S.V. GANGAPURWALA, J.) vvr

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