Jt CIT Spl Range 3,, Pune v. Shri Vighnahar Sahakari Sakhar Kharkhana Limited,, Pune

ITA 107/PUN/2010 | 1997-1998
Pronouncement Date: 30-09-2010 | Result: Dismissed

Appeal Details

RSA Number 10724514 RSA 2010
Bench Pune
Appeal Number ITA 107/PUN/2010
Duration Of Justice 8 month(s) 11 day(s)
Appellant Jt CIT Spl Range 3,, Pune
Respondent Shri Vighnahar Sahakari Sakhar Kharkhana Limited,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-09-2010
Assessment Year 1997-1998
Appeal Filed On 18-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C.SUDHIR JM AND SHRI D. KARUNAKARA RA O AM I.T.A. NO. 107/PN/2010 (ASSTT. YEAR : 1997-1998) JT. COMMISSIONER OF INCOME TAX APPELLANT SPL. RANGE-3 PUNE VS. SHRI. VIGHNAHAR SAHAKARI SAKHAR KARKHANA LIMITED RESPONDENT KASARSAI DARUMBRE JUNNAR PUNE PAN : NOT AVAILABEL APPELLANT BY : SHRI A.S. SINGH RESPONDENT BY : NONE ORDER PER I.C. SUDHIR JM THE REVENUE HAD QUESTIONED THE FIRST APPELLATE OR DER ON THE GROUND THAT THE LD CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT TH E KHODKI CHARGES WAS NOT DIVERSION OF PROFIT AND IS ALLOWABLE AS BUSINESS EX PENDITURE U/S. 37(1) OF THE ACT. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVA NCED BY THE PARTIES IN VIEW OF ORDERS OF THE LOWER AUTHORITIES. 3. THE KHODKI CHARGES ARE PAID TO CANE SUPPLIERS TO COMPENSATE THEM FOR THE WASTAGE OF UNCUT PART OF SUGAR CANE LYING ON THE FA RM AT THE TIME OF HARVESTING THE SUGAR CANE. IN ITS PROFIT AND LOSS ACCOUNT THE AS SESSEE HAS SHOWN TO HAVE MADE PAUYMENT OF RS. 1 67 50 121/- ON ACCOUNT OF KHODKI CHARGES. THE ASSESSEE CLAIMED THE SAME AS EXPENSES INCURRED WHOLLY AND EX CLUSIVELY FOR THE PURPOSE OF BUSINESS. THE A.O DID NOT ACCEPT THE SAME AND MADE DISALLOWANCE OF RS. 1 67 50 121/- CLAIMED ON ACCOUNT OF PAYMENT OF KHOD KI CHARGES. THE LD CIT(A) HAS DELETED THE DISALLOWANCE AFTER DISCUSSION THE ISSUE IN ITS CONCLUDING PARA NUMBERS 7.1 AND 7.2 OF THE FIRST APPELLATE ORDER REPRODUCE D HERE-IN FOR READY REFERENCE :- 7.1 THE REPRESENTATIVE OF THE APPELLANT ARG UES THAT AFTER THE CANE IS CUT AND TAKEN TO THE FACTORY PREMISES THERE REMAINS TH E ROOT PORTION MEASURING ITA NO.107/PN/2010 (SHRI VIGHNAHAR SAHAKARI SAKHAR KARKHANA LIMITED.) (ASSSTT.YEAR 1997-1998) 2 APPROXIMATELY 1 FT. TO 1.5 FT. IN RESPECT OF EACH CANE WHICH IS SUBSEQUENTLY TAKEN OUT BY THE FARMERS BY USING SICKLES. THE SAI D PORTION OF SUGARCANE ACTUALLY CONTAIN HIGH YIELD OF SUGAR AND THEREFORE THIS ROOT PORTION CALLED IN VERNACULAR AS KHODKI IS ALSO BROUGHT TO THE FACTO RY PREMISES AND THE SAME IS PURCHASED BY THE APPELLANT SOCIETY. THE COMMISSIONE R OF SUGAR FIXED THE PRICE ALSO FOR PURCHASE OF SUCH ROOT PIECE CALLED KHODKI AND THESE PIECES ARE ACTUALLY CRUSHED AND JUICE OBTAINED THEREFROM IS US ED IN THE MANUFACTURING OF SUGAR. THEREFORE THESE EXPENSES ARE FULLY AND EXC LUSIVELY FOR THE PURPOSES OF BUSINESS AND IT SHOULD BE ALLOWED. 7.2 THE ASSESSING OFFICER HAS NOT ADEQUATELY CONSID ERED THIS ISSUE. HE IS THEREFORE DIRECTED TO ALLOW THE APPELLANT TO LEAD E VIDENCE FOR ACTUAL PURCHASE OF SUCH ROOT PIECES AND AFTER HAVING SATISFIED HIMS ELF FOR PURCHASE OF SUCH ROOT PIECES HE SHOULD ALLOW THE DEDUCTION. APPEAL SUCCEEDS ON THIS GROUND. 4. IN SUPPORT OF THE GROUND THE LD. D.R. HAS BASIC ALLY PLACED RELIANCE ON THE ASSESSMENT ORDER WHEREAS THE LD. A.R TRIED TO JUST IFY THE FIRST APPELLATE ORDER ON THE ISSUE WITH THE SUBMISSION THAT NOW THE ISSUE HA S BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY MUMBAI SPECIAL BENCH IN THE CASE OF DC IT V/S. MANJARA SSK LTD. (2004) 91 ITD 361 (MUM) (S.B) RESPECTFULLY FOLLOWIN G THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THIS REGARD IN THE CASE OF CIT V/S. PANCHGANGA SSK LTD. (2002) 254 ITR 572 (BOM.). THE HONBLE BOMBAY HIGH COURT HAS ALSO UPHELD THE DECISION OF SPECIAL BENCH ON THE ISSUE IN ITA NO. 3 18 OF 2007 DATED 14.8.2007 5. IN VIEW OF THE ABOVE DEVELOPMENT ESPECIALLY WH EN THE ISSUE IS COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD . THE GROUND IS ACCORDINGLY REJECTED. 6. CONSEQUENTLY THE APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH SEP TEMBER 2010 SD/- SD/- (D. KARUNAKARA RAO) (I.C.SUDHIR) ACCOUNTANT MEMBER JUDICI AL MEMBER PUNE DATED THE 30TH SEPTEMBER 2010 ITA NO.107/PN/2010 (SHRI VIGHNAHAR SAHAKARI SAKHAR KARKHANA LIMITED.) (ASSSTT.YEAR 1997-1998) 3 US COPY OF THE ORDER IS FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A)- I PUNE 4. CIT CONCERNED PUNE 5. D.R. ITAT B BENCH 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES PUNE