SHRI VITHAL SAHAKARI SAKHAR KARKHANA LTD,SOLAPUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 1, SOLAPUR

PER INTURI RAMA RAO, AM:

This is an appeal filed by the assessee Co-operative Society directed against the order of Commissioner of Income Tax (Appeals) – 7, Pune dated 04.07.2017 for the assessment year 2008-09. 2. The appellant raised the following grounds of appeal :-

“On the facts and circumstances of the case and in law of the learned Commissioner of Income Tax (Appeals) – 7, Pune has erred in disallowing and adding back an amount of Rs.69,86,180/- on account of sugar sold at concessional rate.”

The appellant is a Co-operative Society registered under the Maharashtra Co-operative Society Act, 1950. It is engaged into the business

of manufacturing of white sugar. The return of income for A.Y. 2008-09 was filed on 29.09.2008. Against the said return of income, the assessment was completed by the Dy.Commissioner of Income Tax, Circle – 1, Solapur

(hereinafter called as “Assessing Officer”) vide order dated 29.12.2010 passed

under Sec.143(3) of the Act at a total income of Rs.30,96,66,651/-. While

doing so, the Assessing Officer made the following additions :

(i) Excessive sugar cane price paid to its members at Rs.30,67,29,113/-;

(ii) Sale of sugar at concessional rate to its members at Rs.11,08,600/-;

(iii) VSI Contribution at Rs.18,28,938/-

Officer with the following observations :

“5.4. 4. During the year under consideration, the rate of levy sugar per quintal for central Maharashtra and excise duty on free sugar per quintal

(average rates),are not mentioned by the AO. The AO has prima facie calculated concession given to members at Rs. 11,08,600/- AO is directed to obtain rate of levy sugar and excise duty thereon for relevant period and calculate such concession given to members. However, it needs to be ascertained in the first place as to whether the appellant had crushed sugarcane at 50% capacity as compared to the previous season. Subsequently, on satisfaction of the above condition, the extent of such excess quantity of sugar sold i.e in excess of 5 kg sugar per month, at concessional rate to members (including cane suppliers who are members) and quantity of sugar, if any, sold to non-members, needs to be ascertained as it is prima-facie disallowable. The Assessing Officer is, accordingly, directed to quantify the disallowance if any, arising out of concessional sale of sugar in accordance with the directions (a) to (c) contained in para 5.4.3 hereinabove and the disallowance made by the Assessing Officer shall be restricted to such excess sales made. Subject to these directions, ground of appeal is treated as partly allowed.

proceed to dispose of the same.

at concessional rate to its members. This issue requires to be adjudicated on the touchstone of law laid down by the Hon’ble Supreme Court in the case of referring to the questions raised by the Hon'ble Supreme Court in the said

case cited, has remanded the matter back to the file of Assessing Officer to address the questions raised by the Hon'ble Supreme Court in the said case.

The ld.CIT(A) has no power to set aside the issue to the file of Assessing

Officer. However, the power of set aside can be exercised by the Tribunal.

Therefore, we remit the ground of appeal to the Assessing Officer to examine

the allowability of the sale of sugar at concessional rate to its members on the touchstone of law laid down by the Hon'ble Supreme Court in the case of "याियक सद"य "याियक सद"य/JUDICIAL MEMBER लेखा सद"य "याियक सद"य "याियक सद"य लेखा सद"य लेखा सद"य/ACCOUNTANT MEMBER लेखा सद"य

पुणे / Pune; "दनांक / Dated : 24th June, 2021. Yamini

आदेश क" "ितिलिप अ"ेिषत आदेश क" "ितिलिप अ"ेिषत / Copy of the Order forwarded to : आदेश क" "ितिलिप अ"ेिषत आदेश क" "ितिलिप अ"ेिषत अपीलाथ" / The Appellant.

Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.