THE COMMISSIONER OF INCOME TAX vs. ASHOK SAHAKARI SAKHAR KARKHANA LTD

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TA/74/2008HC BombayHCBM03009896200810 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, set aside the impugned order of the Tribunal. The matter was remanded back to the Commissioner (Appeals) for deciding it afresh. The reasoning for this decision was based on the Supreme Court's judgment in Deputy Commissioner of Income-Tax Vs. Shri Satpuda Tapi Prarisar SSK Ltd. and others [(2010) 231 CTS (SC) 224]. The learned counsel for the respondent (assessee) did not dispute that the issue was covered by this Supreme Court decision. Therefore, the High Court found it appropriate to follow the precedent set by the Supreme Court and direct a fresh adjudication by the lower appellate authority. No specific finding on the merits of the issue was given by the High Court.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax (Revenue) against an order of the Income Tax Appellate Tribunal (Tribunal). The assessee is Ashok Sahakari Sakhar Karkhana Ltd. The core of the dispute concerns whether payments made by the assessee, a co-operative sugar factory, to its members or sugarcane producers were excessive and unreasonable. The Revenue is challenging the Tribunal's finding on this issue. The appeal was heard by the High Court of Judicature at Bombay, Bench at Aurangabad, and by consent, was taken up for final hearing 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 holding that the payment made by an assessee (a co-operative sugar factory) to its members or producers of sugarcane was excessive and unreasonable within the meaning of Section 40A(2) and Section 37(1) of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. Revenue's Contention: The Revenue, represented by the learned ASG, 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]. They submitted that on an identical issue, the Supreme Court had remanded the matter to the Commissioner of Appeals for a fresh decision in light of the directions issued by the Supreme Court.

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. 74 OF 2008 THE COMMISSIONER OF INCOME TAX VERSUS ASHOK SAHAKARI SAKHAR KARKHANA LTD … ASG for Appellant : Shri Alok Sharma Advocates for Respondent : S/Shri M.V.Kulkarni & R.R.Chandak … CORAM : D. G. KARNIK & S. B. DESHMUKH, JJ. Dated: February 10, 2012 ... PER COURT :- 1. Heard learned counsel for respective parties. 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 holding that the payment made by an assesee ( a co-operative sugar factory) to it's members or producers of a sugarcane was excessive and unreasonable within the meaning of Section 40A(2) and Section 37(1) of the Income Tax Act, 1961 ?" 4. Learned ASG for the appellant invited our attention to the decision of 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 submitted that on an identical issue the matter has been remanded by the akl

IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD

TAX APPEAL NO. 74 OF 2008 Supreme Court to the Commissioner of Appeals for deciding it afresh in the light of directions issued by the Supreme Court therein. Learned Counsel for the respondent does not dispute that the issue framed above is covered by the decision of the Supreme Court in the case of Deputy Commissioner of Income-Tax Vs. Shri Satpuda Tapi Prarisar SSK Ltd. and others. 5. For these reasons, the impugned order is set aside and the matter is remanded back to the Commissioner (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 Prarisar SSK Ltd. and others [(2010) 231 CTS (SC) 224]. ( S. B. DESHMUKH, J. ) ( D. G. KARNIK, J. ) ... akl

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