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

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TA/92/2008HC BombayHCBM03015501200810 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 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]. In that Supreme Court case, the matter was 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 that a remand order would be appropriate in this case as well. 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 in the cited case. No specific finding was given on the merits of the disallowance itself, as the matter was remanded.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Aurangabad, against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Bhaurao Chavan Sahakari Sakhar Karkhana Ltd. The dispute concerns the assessment year(s) not explicitly stated but implied to be prior to 2008. The Revenue is challenging the ITAT's deletion of disallowances made by the Assessing Officer under Sections 40A(2) and 37(1) of the Income Tax Act, 1961. These disallowances were related to alleged excessive payments of sugarcane price made by the assessee, a cooperative society, to its members and non-members. The High Court heard the appeal at the admission stage by consent of the parties.

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 the sugarcane price paid to its members and non-members by the assessee (a co-operative society)? Assessee's contentions: Not recorded. 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], where the matter was remanded.

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. 92 OF 2008 THE COMMISSIONER OF INCOME TAX AURANGABAD. 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. 92 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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