THE COMMISSIONER OF INCOME TAX vs. BHAURAO CHAVAN SAHAKARI SAKHAR KARKHANA LTD.

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TA/78/2008HC BombayHCBM03012452200810 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, by consent of the parties, took up the appeal for final hearing at the admission stage. The sole issue pressed by the Revenue was whether the Tribunal was justified in deleting the disallowance made by the AO under Sections 40A(2) and 37(1) regarding excessive sugarcane price payments. Both 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]. In that Supreme Court case, the matter was remanded to the Commissioner of Income Tax (Appeals) for a fresh decision. Following this precedent and acknowledging the identical nature of the issue, the High Court found a remand order to be appropriate. Consequently, the impugned order of the Tribunal 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.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal before the Bombay High Court against an order passed by the Income Tax Appellate Tribunal (ITAT). The assessee is Bhaurao Chavan Sahakari Sakhar Karkhana Ltd. The appeal concerns the assessment year(s) not explicitly stated in the provided text. The core dispute revolves around the deletion of disallowances made by the Assessing Officer (AO) under Sections 40A(2) and 37(1) of the Income Tax Act, 1961. These disallowances were related to excessive sugarcane prices paid by the assessee, a co-operative society, to its members and non-members. The ITAT had deleted these disallowances. 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 paid to its members and non-members by the assessee (a co-operative society)? Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the Tribunal was not justified in deleting the disallowance made by the AO under Sections 40A(2) and 37(1) concerning excessive sugarcane price payments. The Revenue relied on the Supreme Court's decision in Deputy Commissioner of Income-Tax Vs. Shri Satpuda Tapi Prarisar SSK Ltd. and others [(2010) 231 CTS (SC) 224] which, while dealing with an identical issue, had remanded the matter for fresh consideration.

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. 78 OF 2008 THE COMMISSIONER OF INCOME TAX VERSUS BHAURAO CHAVAN SAHAKARI SAKHAR KARKHANA LTD. ASG for Appellant : Shri Alok Sharma Advocate for Respondent : Shri D.L.Khivesara 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. 78 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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