LOKNETE MARUTRAO GHULE PATIL DNYANESHWAR SAHAKARI SAKHAR KARKHANA,AHMEDNAGAR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE, AHMEDNAGAR

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ITA 229/PUN/2020Status: DisposedITAT Pune08 July 2022AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal followed a previous ITAT Pune bench decision and set aside the issue to the Assessing Officer for fresh consideration. The AO needs to re-adjudicate whether the difference in sugar prices constitutes an appropriation of profit, guided by the Supreme Court's decision in the Krishna Sahakari Sakhar Karkhana Ltd. case.

What were the facts?

The Assessing Officer added Rs. 1,19,743 on account of sugar sold at a concessional rate to members, considering it a difference between the concessional and market rates. The CIT(A) confirmed this addition.

What were the issues?

Whether the difference between the concessional rate and market rate for sugar sold to members is an appropriation of profit and should be added to the income.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A”

Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE

For Appellant: Shri Pramod S Shingte – AR
For Respondent: Shri Arvind Desai – DR
Hearing: 16/06/2022Pronounced: 08/07/2022

Assessee by Shri Pramod S Shingte – AR Revenue by Shri Arvind Desai – DR Date of hearing 16/06/2022 Date of pronouncement 08/07/2022 आदेश/ ORDER

PER DR.DIPAK P.RIPOTE, AM:

1.

This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income-tax(Appeals), Pune-2’s, order dated 04.12.2019for the Assessment Year 2016-17, involving proceedings under section 250 of the Income Tax Act, 1961. The Assessee has raised the following grounds of appeal:

1. On the facts and in the circumstances of the case and in law the Lower Authorities have erred in disallowing sum of Rs.1,19,743 on account of sugar sold on concessional rate by disregarding appellant’s contention. Your appellant prays for the deletion of entire amount.”

A.Y.2016-17 Loknete Marutrao Ghule Patil Dnyaneshwar Sahakari Sakhar Karkhana (A)

2.

Brief facts of the case are that during the assessment proceedings the assessing officer observed that the assessee had sold sugar at concessional rate to members. The Assessing Officer(AO) added the difference between the concessional rate and market rate.

3.

Aggrieved by the order of the AO, the assessee filed an appeal before the ld.Commissioner of Income Tax(Appeal). The ld.Commissioner of Income Tax(Appeal) confirmed the addition.

4.

Aggrieved by the order of the ld.CIT(A), the assessee filed appeal before this Tribunal.

5.

The ld.Authorised Representative(ld.AR) for the Assessee submitted that the issue is covered in assessee’s favour. The Ld.DR supported the order of lower authorities.

6.

We have heard both parties and perused the records. It is observed that the said issue has been decided by the ITAT Pune bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd., & Others. The ITAT Pune has held as under: “In our considered opinion it would be just and fair if the impugned orders on this score are set aside and the matter is restored to the file of AOs, instead of to the CITs(A), for fresh consideration as to whether the difference between the average price of sugar sold in the market and that sold to members at concessional rate is appropriation of profit or not, in the light of the directions given by the Hon’ble Supreme Court in the case of Krishna Sahakari Sakhar Karkhana Limited (supra).”

A.Y.2016-17 Loknete Marutrao Ghule Patil Dnyaneshwar Sahakari Sakhar Karkhana (A)

7.

Respectfully following the above decision, we set aside this issue to the file of Assessing Officer for re-adjudication in the light of the Hon’ble Supreme Court’s decision in the case of Krishna Sahakari Sakhar Karkhana Ltd., (2012) 27 taxmann.com 162 (SC), order dated 25.09.2012. Accordingly, the Ground No.1 is allowed for statistical purpose.

8.

In the result, Ground No.1 of the assessee is allowed for statistical purpose.

9.

Thus, the appeal of the Assessee is allowed for statistical purpose. Order pronounced in the open Court on 8th July, 2022.

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