ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -1, KOLHAPUR, KOLHAPUR vs. SHREE TATYASAHEB KORE WARANA SAHAKARI SAKHAR KARKHANA LTD., MAHARASHTRA

Q: Which sections of the Income-tax Act were involved?

Section 250, Section 143(3), Section 262

ITA 1154/PUN/2024Status: DisposedITAT Pune31 January 2025AY 2006-079 pages

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the Revenue. The Tribunal noted that the AO's assessment order dated 28.09.2021 had referred to a consolidated ITAT order in ITA No.1210/PUN/1997 & Ors. which set aside the issue of sale of sugar at a concessional rate to the AO for denovo adjudication. The AO had then made the addition. The assessee, however, argued that its case for AY 2006-07 was not part of the consolidated order and that the issue had attained finality due to the Bombay High Court's decision in its own case. The Tribunal found that the AO's assessment order dated 28.09.2021 was passed under Section 143(3) r.w.s. 262 of the Act, and the AO had indeed mentioned that the issue was set aside by the ITAT for denovo adjudication. The CIT(A) had allowed the appeal of the assessee, deleting the addition. The Revenue appealed this deletion. The Tribunal observed that the AO had made the addition based on the ITAT's direction for denovo adjudication. The Tribunal did not explicitly address the assessee's contention regarding the Bombay High Court's order or the exclusion from the consolidated ITAT order in its findings. However, by allowing the Revenue's appeal, it implicitly agreed with the Revenue's stance that the issue should be remanded for denovo adjudication, as indicated by the AO's reference to the ITAT's earlier order.

What were the facts?

The Revenue (Assistant Commissioner of Income Tax, Circle-1, Kolhapur) is in appeal against the order of the CIT(A) for Assessment Year 2006-07. The dispute concerns the deletion of an addition made by the Assessing Officer (AO) on account of the sale of sugar at a concessional rate. The AO had initially made an addition of Rs. 3,07,64,048/- on this account, along with an addition for excessive sugarcane price paid to farmers. The assessee had appealed to the CIT(A), who allowed the appeal, deleting the additions. The AO's assessment order dated 28.09.2021 referred to a consolidated ITAT order in ITA No.1210/PUN/1997 & Ors. which had set aside similar issues for denovo adjudication. The assessee, however, contended that its case for AY 2006-07 was not part of the 120 cases listed in the ITAT's consolidated order and that the issue had attained finality due to the Bombay High Court's dismissal of the Revenue's appeal in its own case.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition on account of the sale of sugar at a concessional rate, ignoring that the ITAT has restored such issues to the file of the AO in various decisions? (Question of law and fact, turning on Section 250 of the Income Tax Act, 1961). 2. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that in the assessee's own case for AY 2015-16, the ITAT restored the issue to the AO, following a coordinate bench decision which relied on another coordinate bench decision? (Question of law and fact, turning on Section 250 of the Income Tax Act, 1961). 3. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that a coordinate bench of the ITAT in ACIT Vs. Shri Shankar SSK Ltd. duly considered relevant precedents before restoring the issue of sale of sugar at a concessional rate to the AO? (Question of law and fact, turning on Section 250 of the Income Tax Act, 1961). Revenue's Contentions: The Revenue relied on the AO's order and argued that since AY 2015-16 was set aside by the ITAT for denovo adjudication following the Supreme Court's decision in CIT Vs. Krishna SSK, AY 2006-07 should also be set aside. The Revenue also relied on a coordinate bench decision in Shree Adinath SSK Ltd. It was further submitted that the sale of sugar to members is regulated under Section 79(A) of the Maharashtra Co-operative Societies Act, 1960, and a circular issued by the Sugar Commissioner, Pune, limits sales to 5 kg per month at concessional rates. The AO had considered this regulation and made an addition for the differential amount between market price and concessional rate. The Revenue cited the Supreme Court's decision in CIT Vs. Krishna SSK, the Maharashtra Co-operative Societies Act, 1960, and the Sugar Commissioner's circular as providing clear guidelines. Assessee's Contentions: The Assessee argued that the AO grossly erred in passing the order regarding the sale of sugar at a concessional rate for AY 2006-07. The Assessee pointed out that its case for AY 2006-07 did not appear in the consolidated ITAT order of 120 cases. Furthermore, the Assessee contended that the issue had attained finality due to the Bombay High Court's order in its own case (Income Tax Appeal(Lodg.) No.2726 of 2009), which dismissed the Revenue's appeal, and the Revenue had not filed any SLP against that decision.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 262

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Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

CIT v. Krishna SSK
211 Taxmann 109 · 2012 · SC
102 citing

Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE

Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Pramod Shingte – AR

For Respondent: Shri Ajay Kumar Keshari – CIT(DR)

Hearing: 26/12/2024

PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Revenue directed against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] under section 250 of the Income Tax Act, 1961; for the A.Y.2006-07, dated 27.03.2024. The Revenue has raised the following grounds of appeal :

On facts and in the circumstances of the case and in law, the ld.CIT(A) erred in deleting the Addition on account of sale of sugar on concessional rate and ignoring the fact that the Hon'ble ITAT vide various decisions has restored the issue to the file of the AO

On facts and in the circumstances of the case and in law, the ld.CIT(A) erred in not appreciating the fact that in assessee's own case for AY 2015-16, the Hon'ble ITAT has restored the issue to the file of AO by following the Coordinate Bench of Pune Tribunal's decision in Hon'ble Tribunal which may please be granted." Submission of ld.DR:

The ld.DR for the Revenue relied on the order of the Assessing Officer. Ld.DR submitted that since A.Y.2015-16 has been set-aside by ITAT to Assessing Officer(AO) for denovo adjudication following the principles laid down by Hon'ble Supreme Court in the case of CIT Vs. Krishna SSK [2012] 211 Taxmann 109 (SC), the A.Y.2006-07 may also be set-aside. Ld.DR also relied on the decision of Co-ordinate Bench of the ITAT Pune in the case of Shree Adinath SSK Ltd., in ITA 2.1 The ld.CIT(DR) in the written submission submitted that it is evident that the sale of sugar by the sugar factories to their members is not a discretionary decision of the factory, but is regulated under section 79(A) of the Maharashtra Co-operative Societies Act, 1960. In accordance with this provision, the Sugar Commissioner, Pune has issued a circular to regulate the sale of sugar to members. As stated above, the sale of sugar to a member should not exceed 5 kg per month at a concessional/subsidized rate. Hence, there is no ambiguity regarding the regulation of sugar sales to members. Furthermore, it is important to highlight that the Assessing Officer(AO) took note of this regulation and the circular and incorporated the same into the assessment orders for A.Y.2017-18 and A.Y.2018-19. The AO carefully examined the matter based on the practices adopted by the State Government as per its Policy and made an addition for the Differential Amount between the Market Priceand the Concessional Rate.

2 It is evident that the State Government has already enacted legislation under section 79(A) of the Maharashtra Co-operative Societies Act, 1960 to discourage the practice of selling sugar at concessional rates. Additionally, the Hon'ble Supreme Court's decision in CIT Vs. Krishna SSK [2012] 211 Taxmann 109 (SC), along with the provisions of the Maharashtra Co-operative Societies Act, 1960 and the circular dated 01.03.2006 issued by the Sugar Commissioner, Pune have provided clear guidelines on the matter. Submission of ld.AR:

The ld.Authorised Representative(ld.AR) for the Assessee filed paper book. Ld.AR invited our attention to the assessment order for A.Y.2006-07 dated 28.09.2021. The Assessing Officer has referred in paragraph-1 of the assessment order to the Hon'ble and observed that ITAT in Assessee's own case has set-aside the issue of sale of sugar at concessional rate to the Assessing Officer. Ld.AR invited our attention to the Consolidated Order of ITAT in 120 cases, dated 01.05.2019 and explained that the assessee's case for A.Y.2006-07 does not appear in the said 120 cases list. Therefore, ld.AR submitted that AO has grossly erred in passing the order regarding sale of sugar at concessional rate for A.Y.2006-

07.

Ld.AR submitted that the issue had attained finality by Hon'ble Bombay High Court's order in assessee's own case in vide which Hon'ble Bombay High Court dismissed the appeal of the Revenue. Ld.AR further submitted that Revenue has not filed any SLP against the decision of Hon'ble Bombay High Court regarding sale of sugar at concessional rate. Therefore, ld.AR pleaded that this issue has attained finality for the assessee. Findings & Analysis:

We have heard both the parties and perused the records. It is observed that the assessment order dated 28.09.2021 is passed under section 143(3) r.w.s.262 of the Act. The Assessing Officer has mentioned in the assessment order that assessment order for A.Y.2006-07 was passed on 26.12.2008 determining income at Rs.90,83,66,451/-, by making addition of Rs.80,65,02,150/- on account of excessive sugar cane price paid to the farmers and Rs.3,07,64,048/- on account of sale of sugar at concessional rate to members and non-members. Assessing Officer further mentioned in the assessment order that assessee had filed appeal against the assessment order dated 26.12.2008 before ld.CIT(A). Then, the matter went to Hon'ble ITAT Pune Bench. Then, the Assessing Officer in the assessment order dated 28.09.2021 has mentioned as under : “Since, there were a number of appeal on the similar ground against the order of CIT(A), filed either by the revenue or the assessee, the Hon'ble ITAT Pune Bench Pune passed a consolidated order in the pronounced on 01-05-2019."

1 Thus, Assessing Officer observed that the issue of excess cane price paid to farmers and sale of sugar at concessional rate has been set-aside by ITAT to the Assessing Officer for denovo adjudication. The Assessing Officer then passed the assessment order dated 28.09.2021 and made an addition of Rs.3,07,64,048/- on account of sale of sugar at concessional rate and Rs.80,65,02,150/- on account of excessive cane price. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A). Ld.CIT(A) vide order dated 27.03.2024 allowed the ground of appeal regarding Excess Cane Price and Sale of Sugar at Concessional Rate. Aggrieved by the order of the ld.CIT(A), Revenue has filed appeal before this Tribunal.

We have perused the Hon'ble ITAT Pune's Order in ITA ready deference, the first page of the said order is reproduced here as under :

07.

We have perused the Hon'ble ITAT Pune's Order in ITA ready deference, the first page of the said order is reproduced here as under :

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