DCIT, CHENNAI v. The Maduranthakam Co-op Sugar Mills Ltd., Padalam

ITA 1975/CHNY/1998 | 1994-1995
Pronouncement Date: 19-01-2011 | Result: Allowed

Appeal Details

RSA Number 197521714 RSA 1998
Assessee PAN AAAAT0015F
Bench Chennai
Appeal Number ITA 1975/CHNY/1998
Duration Of Justice 12 year(s) 2 month(s) 2 day(s)
Appellant DCIT, CHENNAI
Respondent The Maduranthakam Co-op Sugar Mills Ltd., Padalam
Appeal Type Income Tax Appeal
Pronouncement Date 19-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 19-01-2011
Date Of Final Hearing 17-01-2011
Next Hearing Date 17-01-2011
Assessment Year 1994-1995
Appeal Filed On 16-11-1998
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE DR. O.K. NARAYANAN VICE-PRESIDENT AND SHRI HARI OM MARATHA JUDICIAL MEMBER] I.T.A NO. 1975/MDS/1998 ASSESSMENT YEAR : 1994-95 THE DY. CIT SPECIAL RANGE V CHENNAI VS THE MADURANTHAKAM CO-OP. SUGAR MILLS LTD PADALAM 603 308 [PAN AAAAT0015F] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB RESPONDENT BY : SHRI S. SRIDHAR O R D E R PER HARI OM MARATHA JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) III CHENNAI DATED 3.9.1998. THE GROU NDS RAISED IN THIS APPEAL ARE AS UNDER: 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IN SO FAR AS IT RELATES TO GRANT OF DEDUCTIONS UNDER SEC.8OP (2)(A)(I) AND UNDER SEC.80P(2)(A)(III) OF THE INCOME-TAX ACT IS CONTRARY TO LAW AND THE FACTS OF THE CASE. 2.1 THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN GRANTING DEDUCTION U/S 80P(2)(A)(I) IN RESPECT OF INTEREST RECEIVED BY THE ASSESSEE FROM THE AMOUNTS ADVANCED TO ITS MEMBERS. ITA 1975/98 :- 2 -: 2.2 THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE NOTED THAT THE PRIMARY OBJECT OF THE ASSESSEE SOCIETY IS ONLY THAT OF MANUFACTURE AND SALE OF SUGAR AND THAT THE PROVISIONS OF SECTION 80P(2)(A)(I) ARE APPLICABLE ONLY TO A CO. OPERATIVE SOCIETY WHOSE MAIN OBJECT IS BANKING AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS. 2.3 THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE NOTED THAT THE DECISION OF THE MADRAS BENCH O F INCOME-TAX APPELLATE TRIBUNAL RELIED ON BY HIM HAS NOT BECOME FINAL AND THE REFERENCE APPLICATION FILED BY THE DEPARTMENT IS PENDING' BEFORE THE HIGH COURT. 3.1 THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE SOCIETY IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(III) OF THE INCOME-TAX ACT 1961 IN RESPECT OF PROFITS DERIVED BY IT FROM SALE OF SURPLUS SUGAR-CANE TO OTHER SUGAR MILLS. 3.2 THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE NOTED THAT THE MAIN OBJECT OF THE ASSESSEE SOCIETY IS THAT OF MANUFACTURE AND SALE OF SUGAR AND THAT THE PROVISIONS OF SEC.80P(2)(A)(III) WOULD BE APPLICABLE ONLY TO A CO.OPERATIVE SOCIETY WHOSE MAIN OBJECT IS THAT OF MARKETING OF AGRICULTURAL PRODUCTS OF ITS MEMBERS. 3.3 THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE NOTED THAT THE DECISION OF THE MADRAS BENCH OF THE INCOME- TAX APPELLATE TRIBUNAL RELIED ON BY HIM HAS NOT BECAME FINAL AND THE REFERENCE APPLICATION FILED BY THE DEPARTMENT IS PENDING BEFORE THE MADRAS HIGH COURT. 4. FOR THESE AND OTHER REASONS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE A CO-OPERATIVE SOCIETY IS ENGAGED IN THE MANUFACTURE AND SALE OF SUGAR. THE ASSESSEE CLAIMED DEDUCTIONS U/S 80P(2)(A)(I) A ND 80P(2)(A)(III) OF THE INCOME-TAX ACT 1961 ON ACCOUNT OF INTEREST R ECEIVED FROM ITA 1975/98 :- 3 -: MEMBERS ON LOANS AND ADVANCES AND ON PROFIT EARNED ON SALE OF AGRICULTURAL PRODUCE OF ITS MEMBERS RESPECTIVELY. THE ASSESSING OFFICER REJECTED BOTH THE CLAIMS BUT THE LD. CIT(A ) HAS ALLOWED THE CLAIMS OF THE ASSESSEE BY FOLLOWING THE DECISION OF ITAT CHENNAI C BENCH IN THE CASE OF DHARMAPURI DISTRICT CO-OP. SU GAR MILLS LTD IN I.T.A.NO.1993/MDS/1991 FOR ASSESSMENT YEAR 1988-89 . THE TRIBUNAL FOLLOWING ITS ORDER FOR EARLIER YEARS IN ASSESSEES OWN CASE CONFIRMED THE FINDINGS OF THE LD. CIT(A) AND DISMISSED THE RE VENUES APPEAL. THEREAFTER THE REVENUE RAKED UP THE SAME ISSUES BEF ORE THE HON'BLE HIGH COURT WHO IN TURN HAS GIVEN THE FOLLOWING D IRECTIONS IN ITS ORDER DATED 20.4.2001: 2. IT IS SUBMITTED BY BOTH THE LEARNED COUNSEL TH AT THE ISSUE IS COVERED BY THE JUDGMENT IN (2008) 306 ITR 392(SC) [COMMISSIONER OF INCOME-TAX VS PONNI SUGARS & CHEMICALS LTD] WHERE THE HON'BLE SUPREME COURT HAS REMITTED THE MATTER TO THE TRIBUNAL FOR DENOVO CONS IDERATION AS PER THE PRINCIPLES LAID DOWN IN THAT CASE. 3. AT THE TIME OF HEARING BOTH THE PARTIES WERE OF THE OPINION THAT TO ASCERTAIN THE FACTS IN THE LIGHT OF THE HON 'BLE SUPREME COURTS DECISION IN THE CASE OF PONNI SUGARS & CHEMICALS LT D (SUPRA) BECAUSE THE HON'BLE HIGH COURT HAS GIVEN DIRECTION TO THE T RIBUNAL TO FOLLOW THE GUIDELINES LAID THEREIN THE MATTER NEEDS TO BE RES TORED TO THE ASSESSING OFFICER. IN VIEW OF THE FACTS AND CIRCUM STANCES OF THIS CASE AND IN THE FITNESS OF THINGS TO COMPLY WITH THE DI RECTIONS OF THE HON'BLE HIGH COURT WE RESTORE THIS APPEAL TO THE FILE OF THE ASSESSING ITA 1975/98 :- 4 -: OFFICER WITH A DIRECTION TO GIVE EFFECT TO PARA 2 O F THE HON'BLE HIGH COURTS DECISION (SUPRA) IN THEIR LETTERS AND SPIR IT. ACCORDINGLY THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICA L PURPOSES. 4. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 19.1 .2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 19 TH JANUARY 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR