THE COMMISSIONER OF INCOME TAX vs. TERNA SHETKARI SAHAKARI SAKHAR KARKHANA LTD.

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TA/82/2008HC BombayHCBM03012454200810 February 2012Author: HON'BLE SHRI JUSTICE S.B.DESHMUKH,HON'BLE SHRI JUSTICE D. G. KARNIK2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the issue involved in the present case was identical to the one decided by the Supreme Court in Deputy Commissioner of Income-Tax Vs. Shri Satpuda Tapi Prarisar SSK Ltd. and others [(2010) 231 CTS (SC) 224]. In that Supreme Court case, the matter had been remanded to the Commissioner of Income Tax (Appeals) for a fresh decision in light of the directions issued by the Supreme Court. Therefore, the High Court found a remand order to be appropriate for the present case as well. The impugned order of the ITAT was set aside, and the matter was remanded back to the Commissioner of Income Tax (Appeals) for deciding it afresh in light of the Supreme Court's decision. No specific finding was given on the merits of the disallowance itself, as the matter was sent back for fresh adjudication.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Terna SSK Ltd., a co-operative society. The dispute pertains to the assessment year(s) not explicitly stated in the provided text. The Assessing Officer had disallowed a certain amount under Sections 40A(2) and 37(1) of the Income Tax Act, 1961, on account of alleged excessive payment of sugarcane price to its members and non-members. The ITAT had deleted this disallowance. The High Court heard the appeal by consent at the admission stage.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the disallowance made by the Assessing Officer under Section 40A(2) and 37(1) of the Income Tax Act, 1961, on account of excessive payment of sugarcane price to its members and non-members by the assessee (a co-operative society)? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the Tribunal was not justified in deleting the disallowance made by the Assessing Officer under Sections 40A(2) and 37(1) concerning excessive sugarcane price payments. The Revenue relied on the fact that the issue was identical to one decided by the Supreme Court in Deputy Commissioner of Income-Tax Vs. Shri Satpuda Tapi Prarisar SSK Ltd. and others [(2010) 231 CTS (SC) 224].

Which sections of the Income-tax Act were involved?

Section 40A(2),Section 37(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD ....TA/82/2008.... THE COMMISSIONER OF INCOME TAX VERSUS TERNA SSK LTD. DHOKI ASG for Appellant : Shri Alok Sharma Advocates for Respondent : Shri A.A.Nimbalkar h/f Shri V D Salunke CORAM : D. G. KARNIK & S. B. DESHMUKH, JJ. Dated: February 10, 2012 PER COURT :- 1. Heard respective counsel. 2. By consent, the appeal is taken up for final hearing at the stage of admission. 3. The only issue which is pressed on behalf of the Revenue in this appeal is:- “ Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the dis-allowance made by the Assessing Officer under Section 40A(2) and 37(1) of the Income Tax Act, 1961 on account of excessive payment of the sugarcane price paid to it's members and non-members by the assessee ( a co-operative society) ?” 4. Learned counsel for the parties are at ad idem that identical issue was decided by the Supreme Court in the case of Deputy Commissioner of Income-Tax Vs. Shri Satpuda Tapi Prarisar SSK Ltd. and others [(2010) 231 CTS (SC) 224] and in that case the matter has been remanded by the Supreme Court to the Commissioner of Income Tax (appeals) for deciding it afresh in the light of akl

IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD

TAX APPEAL NO. 82 OF 2008 directions issued by the Supreme Court therein. Since the issue involved in the present case is also identical, in our view, the remand order would be appropriate. Hence, we pass the following order.

5.

The impugned order is set aside and the matter is remanded back to the Commissioner of Income Tax (Appeals) for deciding it afresh in the light of the decision of the Supreme Court in the case of Deputy Commissioner of Income Tax Vs. Shri Satpuda Tapi Parisar Sahakari Sakhar Karkhana Ltd. and others [(2010)

CTS

(SC)

224]. ( S. B. DESHMUKH, J. ) ( D. G. KARNIK, J. ) akl

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