ASSISTANT COMMISSIONER OF INCOME TAX vs. KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LTD, KOLHAPUR

आदेश / ORDER

PER SUSHMA CHOWLA, JM:

Both the appeals filed by the Revenue are against consolidated order of CIT(A)- 1, Kolhapur, dated 27.09.2016 relating to assessment years 2012-13 & 2013-14 against respective orders passed under section 143(3) of the Income Tax Act 1961 (in short the ‘Act’).

ITA Nos.2726 & 2727/PUN/2016 A.Ys.2012-13 & 2013-14

issues were heard together and are being disposed of by this consolidated order for the

sake of convenience. In order to adjudicate the issues, reference is being made to the

facts in ITA No.2726/PUN/2016, relating to assessment year 2012-13.

has raised the following grounds of appeal:-

“1) Whether on the facts and in the circumstances of the case and in law, the learned CIT (Appeals) was justified in holding that the payment of rate difference of Rs.41,73,35,710/- after the closure of the accounting year do not amount to distribution of profits, as the amount to be paid was not out of the profits ascertained at the Annual General Meeting? 2) Whether on the facts and in the circumstances of the case and in law, the CIT (A) was justified in holding that the payment of Rs.41,73,35,710/- on account of rate difference is out of commercial expediency, when there is no demand from milk suppliers? 3) Whether on the facts and in the circumstances of the case and in law, the CIT (A) was justified in deleting the addition of Rs.9,46,087/- made by the AO towards depreciation on fixed assets on project without deducting subsidy received from the National Dairy Development Board, ignoring the provisions of section 43(1) and Explanation 10 to section 43(1) of the Act? 4) The appellant prays that the order of the CIT(A) be vacated and that of the Assessing Officer be restored. 5) The appellant craves leave to add, alter, amend or modify any other grounds of appeal at the time of proceedings before the Hon'ble Tribunal which may please be granted.”

out that the issue raised in the present appeal is squarely covered by the orders of

Tribunal in assessee’s own case and also by the orders of Hon’ble Bombay High Court

in assessee’s own case. Our attention was drawn to the orders of Tribunal and the

Hon’ble Bombay High Court as under:-

i) ITA Nos.401/PN/2005 to 405/PN/2005, relating to assessment years 1996-97 to 2001-02, order dated 26.09.2005

ii) CIT Vs. (1) Solapur Dist. Co-op. Milk Producers and Process Union Ltd. (2) Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. (2009) 315 ITR 304 (Bom)

ITA Nos.2726 & 2727/PUN/2016 A.Ys.2012-13 & 2013-14

iii) CIT Vs. Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. in Income Tax Appeal No.1156 of 2014 with Income Tax Appeal No.1157 of 2014, judgment dated 27.10.2016

iv) ACIT Vs. Kolhapur Zilla Sah. Dudh Utpadak Sangh Ltd. in ITA No.578 to 580/PUN/2016, A.Ys. 2009-10 to 2011-12, decided on 27.02.2018

placed reliance on the order of Assessing Officer.

of the case, the assessee was Co-operative society engaged in the business of

processing of milk and milk products. The assessee was collecting milk from primary

milk societies spread over Kolhapur and adjoining districts. The assessee claimed

deduction under section 80P of the Act. The issue which is raised by the Revenue vide

ground of appeal No.1 is on account of distribution of profit after the closure of

accounting year in the garb of payment of additional price for purchase of milk. The

Revenue is aggrieved by deletion of addition of Rs.41,73,35,710/- in assessment year

2012-13. The said issue has been raised vide grounds of appeal No.1 and 2. The next

issue which has been raised is against the order of CIT(A) in ignoring the provisions of

section 43(1) of the Act.

Dudh Utpadak Sangh Ltd. (supra) had decided similar issue raised by the Revenue.

The issues which were raised before the Hon’ble High Court read as under:-

“(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in law in holding that the payment of rate difference after the closure of the accounting year do not amount to distribution of profit, as the amount to be paid was not out of the profit ascertained at the annual general meeting? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in law in holding that the Explanation 10 to Section 43(1) was prospective being substantive law in nature and content de hors the decision of Hon'ble Supreme Court reported in 224 ITR 557?”

ITA Nos.2726 & 2727/PUN/2016 A.Ys.2012-13 & 2013-14

“3. Reg. Question (a):- (a) The impugned order of the Tribunal dismissed the Revenue’s Appeal before it on the issue raised herein by following the decision of this Court in CIT v/s. Kolahpur Zilla Sahakari Dudh Utpadak Sangh Ltd. 315 ITR 304. (b) It is an agreed position between the parties that the issue raised herein stands concluded by the decision of this Court in Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. (supra) in favour of the Respondent-Assessee. (c) In the above view, the question as framed does not give rise to any substantial question of law as the impugned order has merely followed the binding decision of this Court. Thus, not entertained.”

“4. Reg. Question (b):- (a) The impugned order of the Tribunal dismissed the Revenue’s Appeal on the issue raised herein by following its own order in the Respondent-Assessee’s own case in respect of the Assessment Years 1999-2000, 2001-02, 2005-06 and 2006-07. (b) Mr. Singh, learned Counsel appearing for the Revenue is unable to points out whether or not any appeal on the issue raised herein, has been filed by the Revenue. In fact, the order of this Court in Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. (supra), appears to be an appeal by the Revenue in respect of the very orders which are being relied upon by the impugned order (as evident from paragraph 14 of the order of the CIT(A)). However, the issue raised herein was not even an issue raised therein.

(c) In the above view, the question as framed does not give rise to any substantial question of law as the impugned order of the Tribunal has merely followed its own orders for the earlier Assessment Years, which have been accepted by the Revenue. Thus, not entertained.”

order of Hon’ble Bombay High Court in CIT Vs. (1) Solapur Dist. Co-op. Milk Producers

and Process Union Ltd. (2) Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. (supra),

which has been applied in assessment years 2007-08 and 2008-09. The year under

appeal before us is assessment year 2012-13 and following the same parity of

reasoning, we uphold the order of CIT(A) in this regard and dismiss the grounds of

appeal No.1 and 2 raised by the Revenue.

order of Hon’ble High Court in assessee’s own case relating to assessment years 2007-

5 ITA Nos.2726 & 2727/PUN/2016 A.Ys.2012-13 & 2013-14

08 and 2008-09, wherein the Hon’ble High Court has observed that the relief was given to assessee in earlier years, against which the Revenue had not filed any ground, though it had filed the appeal in respect of said orders of Tribunal. The Hon’ble High Court thus, dismissed the grounds of appeal raised by the Revenue in this regard. Applying the said ratio, we dismiss the ground of appeal No.3 raised by the Revenue.

Order pronounced in the open Court on this 30th day of August, 2018.

Sd/- Sd/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER पुणे / Pune; �दनांक Dated : 30th August , 2018. SB आदेश क� ��त�ल�प अ�े�षत/Copy of the Order is forwarded to : 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. आयकर आयु�त(अपील) / The CIT(A)-1, Kolhapur; 4. The Pr. CIT-1, Kolhapur; 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, पुणे “बी” / DR ‘B’, ITAT, Pune; 6. गाड� फाईल / Guard file.

// True Copy // आदेशानुसार/ BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.