ASSISTANT COMMISSIONER OF INCOME-TAX vs. SHRI VRIDHESHWAR SAHAKARI SAKHAR KARKHANA LTD.,, AHMEDNAGAR

PER ANIL CHATURVEDI, AM :

This appeal filed by the Revenue is emanating out of the consolidated order of Commissioner of Income Tax (A) – IT/TP, Pune dated 11.03.2014 for the assessment years 2008-09 to 2010- 11.

Assessee is a Co-operative Society stated to be engaged in the business of manufacturing and sale of sugar and its by-products.

Assessee filed its return of income for A.Y. 2009-10 on 30.09.2009

declaring total income of Rs. Nil after claiming set off of unabsorbed

losses. The case was selected for scrutiny and thereafter

assessment was framed u/s 143(3) of the Act vide order dated

30.11.2011. Aggrieved by the order of AO, assessee carried the

matter before Ld.CIT(A) who vide consolidated order dt.11.03.2014

granted partial relief to the assessee. Aggrieved by the order of

Ld.CIT(A), Revenue is now in appeal before us and has raised the

following grounds :

“1. The order of the Commissioner of Income Tax (Appeals) is contrary to law and to the facts and circumstances of the case. 2. The learned Commissioner of Income-tax (Appeals) erred in deleting the addition of Rs.17,68,693/- made in the assessment on account of difference between the market price of sugar and the concessional price at which sugar was sold/supplied to the cane growers when, in fact ,the difference was not at all in the nature of any business expenditure, and ,on the contrary , represented distribution of profit. 3. The learned Commissioner of Income-tax (Appeals) erred in failing to appreciate that concessional sale effectively involves an expenditure, albeit an indirect one, in as much as instead of crediting the concessional sale . amount to the profit and loss account, the assessee could have credited the gross sales and debited the amount of concession in which event the expenditure represented by the debit would have directly come under the sweep of section 40A(2). 4. The learned Commissioner of Income-tax(Appeals) erred in deleting the addition on the issue of concessional sale of sugar without following guidelines prescribed by the Hon'ble Supreme Court of India in the case of CIT Vs Krishna Sahakari Sakhar Karkhana Ltd in Civil Appeal no 6949 of 2012 vide order dated 25/09/2012.”

the Revenue is not maintainable on account of low tax effect and

therefore, the appeal of the Revenue be dismissed. Ld.D.R. did not

object to the aforesaid contention made by the Ld.A.R.

material available on record. On perusing the grounds of appeal

raised by the Revenue, we find that Revenue is aggrieved by the

order of ld. CIT(A) in respect of the relief given by him. As per the

recent announcement of Central Board of Direct Taxes (CBDT)

dated 11.07.2018 (Circular No. 3 of 2018), no Department appeals

are to be filed against relief given by ld. CIT(A) before the Income

Tax Appellate Tribunal unless the tax effect, excluding interest,

exceeds Rs.20 lakhs and it further states that the instructions will

apply retrospectively to the pending appeals also. In the present

case, since it is an undisputed fact that on the addition which is in

dispute, the tax effect is less than Rs.20 lakhs and in the absence of

any material placed on record by the Revenue to demonstrate that

the issue in the present appeal is covered by exceptions provided in

para 10 of the aforesaid CBDT Circular, we are of the view that the

monetary limit prescribed by the instructions of the aforesaid CBDT

Circular would be applicable to the present appeal of the

Department. We therefore hold the present appeal of Revenue to be

not maintainable on account of low tax effect and accordingly

dismiss the appeal of Revenue without expressing any opinion on

merits of the case. However, in case there is any error in the

computation of the tax effect involved or if for any reason, the

aforesaid CBDT Circular is not applicable, it would be open to the

Revenue to seek revival of the appeal. Thus, the grounds of the

Revenue are dismissed.

Order pronounced in open Court on 19th day of March, 2019.

Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 19th March, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. The CIT(A)-IT/TP, Pune. The CIT-I, Pune. 4 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” / DR, 5. ITAT, “A” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.