INCOME TAX OFFICER, BASTI vs. M/S. SAHKARI GANNA VKAS SAMTI LIMITED, BASTI

This is Revenue’s appeal against the order of the ld. CIT(A)-1, Lucknow, dated 11.10.2018 for Assessment Year 2015- 16, raising the following Grounds of Appeal:

1. Whether the learned CIT(A) was right, without giving a finding of facts, of efforts made earning "Commission" from sugar mills on sugarcane independently supplied by sugarcane growers in catchment area to sugar mills at rates determined by the State Government, to conclude that such receipts were "business" receipts. 2. Whether the learned CIT(A) was right in directing deduction under section 80P in respect of such gross receipts from sugar mills, especially without giving finding of fact that such receipts were duly earned as business receipts. 2. The assessee has filed Cross-Objection, raising the following Grounds:

1. The Assessing Officer has wrongly disbelieved the books of account of the Cross-Objector but the ld. CIT(A) has not adjudicated upon this issue.

2. The ld. CIT(A) has failed to adjudicate upon the issue of quantum of estimate of total income made by the Assessing Officer.

3. The ld. CIT(A) has failed to consider that the computation of total income has not been made by the Assessing Officer in the manner laid down under mandatory provisions of the Income Tax Act.

3. The brief facts of the case are that the assessee has filed its return of income on 18.9.2015, showing profit and gains from business and profession at Rs.1,81,46,551/- and after claiming deductions under section 80P of the I.T. Act, the total income was shown as Nil. The case was selected from scrutiny through CASS and the assessment was completed at an income of Rs.1,81,46,551/-. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A), who held that the assessee is entitled for deduction under section 80P(2)(a)(iii) of the I.T. Act with respect to the commission income, amounting to Rs.1,81,46,551/- earned by the assessee from Sugar Mills, and accordingly directed the Assessing Officer to allow deduction under section 890P of the I.T. Act to the assessee. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal challenging the order of the ld. CIT(A) and the assessee has filed cross objection.

, the assessee has challenged the order of the ld. CIT(A), stating that the Assessing Officer has wrongly disbelieved the books of account of the assessee, but the ld. CIT(A) has not adjudicated upon this issue; that the ld. CIT(A) has failed to adjudicate upon the issue of quantum of estimate of total income made by the Assessing Officer; and that the ld. CIT(A) has failed to consider that the computation of total income has not been made by the Assessing Officer in the manner laid down under mandatory provisions of the Income Tax Act.

6. Since, both, the Revenue as well as the assessee are aggrieved by the order of the ld. CIT(A), and particularly when the grievance of the assessee is that certain issues have not been adjudicated upon by the ld. CIT(A), the matter, in the interest of justice, needs to be sent back to the file of the ld. CIT(A) for adjudicating upon the issues raised by the assessee during the course of appellate proceedings. At the same time, the ld. CIT(A) will also consider the Grounds of appeal raised by the Revenue and to pass an order as per law. Accordingly, we set aside the order of the ld. CIT(A) and restore the matter to his file to decide the issue afresh in accordance with law.

7. In the result, the appeal of the Revenue as well as the Cross Objection of the assessee are allowed for statistical purposes.

Order pronounced in the open Court on 05/08/2022.