Loading judgment…
Facts
The assessee, a cooperative sugar factory, filed an appeal against the order of the ld.CIT(A)[NFAC] disallowing an amount of Rs. 45,76,534/- paid as excess cane price to its members for Assessment Year 2007-08.
Held
The Tribunal noted the recent statutory amendment in the Finance Act, 2023, which inserted Section 155(19) into the Income Tax Act, 1961, providing relief to cooperative sugar factories on this issue. Since the assessee has already filed an application under this new section, the Tribunal remitted the matter back to the Assessing Officer to decide the application in accordance with the amended provisions.
Key Issues
Whether the excess cane price paid by a cooperative sugar factory to its members is an allowable deduction, considering the new statutory amendment under Section 155(19) of the Income Tax Act, 1961, and if the case should be remitted to the Assessing Officer for re-computation.
Sections Cited
250, 155(19), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961, dated 25.10.2024 for Assessment Year 2007-08. The assessee has raised the following grounds of appeal :
“1. On the fact and in the circumstances of the case and in law of the learned NFAC – Commissioner of Income Tax(Appeals) Delhi, has erred in disallowing and adding back an amount of Rs.45,76,534/- on account of Excess Cane price paid to members. 2. The appellant craves for the leave, add, alter, amend, modify and delete any or all the above grounds of appeal s before or at the time of the hearing.” Findings & Analysis :
2. We have heard both the parties and perused the records. The only issued involved before us is whether price paid for purchase of sugar cane to the members is allowable as deduction or not!
There has been a long-drawn litigation in the case of the assessee on this issue. However, we do not intend to discuss the long-drawn litigation, as after the Amendment to the Income Tax Act, issue is almost settled.
3.1 “In the Finance Act 2023, the Government has made statutory amendment by inserting sub-section (19) in section 155 of the Income Tax Act, 1961 granting relief to cooperative sugar factories, which is reproduced as follows:
155(19) - Where any deduction in respect of any expenditure incurred for the purchase of sugarcane has been claimed by an assessee, being a co-operative society engaged in the business of manufacture of sugar, and such deduction has been disallowed wholly or partly in any previous year commencing on or before the 1st day of April, 2014, the Assessing Officer shall, on the basis of an application made by such assessee in this regard, recompute the total income of the assessee for such previous year after allowing deduction to the extent such expenditure is incurred at a price which is equal to or less than the [A] price fixed or approved by the Government for that previous year, and the provisions of section 154 shall, so far as may be, apply thereto, and the period of four years specified in sub-section (7) of that section shall be reckoned from the end of previous year commencing on the 1st day of April, 2022.] 3.2 Further, the SOP for application for Re-computation of total income of co-operative society engaged in the business of manufacture of sugar as provided in the sub-section 19 of Sec. 155 of the LT. Act, 1961 was issued by CBDT on 27/07/2023 vide Circular No.14 Qf2023.”
It is an admitted fact that assessee has filed an application under section 155(19) of the Act as per the procedure laid down after the Amendment. In these facts and circumstances of the case, we set-aside the issue to the Assessing Officer to decide the application of the assessee filed u/s.155(19) of the Act.