THE COMMISSIONER OF INCOME TAX, AURANGABAD vs. MANJARA SHETKARI SAHAKARI SAKHAR KARKHANA LTD.

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TA/118/2008HC BombayHCBM03021582200810 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 since the issue involved in the present case is 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], a remand order would be appropriate. The impugned order of the ITAT was set aside. The matter was remanded back to the Commissioner of Income Tax (Appeals) for deciding it afresh in light of the decision of the Supreme Court in the aforementioned case. The specific findings of the ITAT or the reasoning that led to its deletion of disallowance are not detailed as the High Court is remanding the matter. The ratio decidendi is that identical issues decided by the Supreme Court with a direction for remand warrant a similar approach by the High Court. No issue was expressly left undecided, but the substantive issue remains to be decided by the lower appellate authority.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Aurangabad (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Manjara Shetkari Sahakari Sakhar Karkhana Ltd. The dispute concerns the assessment year(s) not explicitly stated but implied to be under challenge. The Revenue is challenging the ITAT's decision to delete a disallowance made by the Assessing Officer. The disallowance was under Sections 40A(2) and 37(1) of the Income Tax Act, 1961, related to excessive sugarcane price paid by the assessee, a cooperative society, to its members and non-members. 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 cooperative society)? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue pressed the above issue. The counsel for the parties agreed that an identical issue was 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], where the matter was remanded by the Supreme Court to the Commissioner of Income Tax (Appeals) for fresh decision in light of the Supreme Court's directions.

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 TAX APPEAL NO. 118 OF 2008 THE COMMISSIONER OF INCOME TAX, AURANGABAD VERSUS MANJARA SHETKARI SAHAKARI SAKHAR KARKHANA LTD. ASG for Appellant : Shri Alok Sharma Advocate for Respondent : Shri N D Sonawane h/f Shri V D Hon 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. 118 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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