Partly allowed

The C.I.T.Kolhapur. v. Vasantdada Shetkari S.S.K.Ltd.

Bombay HC9 Oct 2014ITR/478/1997

Case brief

AI extract

What is this about?

In this income-tax reference, the High Court addressed questions regarding the tax status of various funds collected by an agricultural society. The Court held that some funds were not trading receipts, remanded the issue of the Area development fund to the Tribunal, and determined that the Cane Development Fund is taxable income.

What did the court decide?

Non-refundable deposits, Interest on deposits, Chief Minister's Fund, and Small savings treated as non-trading receipts; Cane Development Fund treated as taxable income; Area development fund remanded

The C.I.T.Kolhapur. Vs Vasantdada Shetkari S.S.K.Ltd. — Income Tax | Bombay HC (2014)

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itr478-97

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sas

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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INCOME TAX REFERENCE NO.478 OF 1997

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The Commissioner of Income Tax, Kolhapur

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..Applicant.

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V/s.

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Vasantdada Shetkari S.S.K. Ltd., Sangli ..Respondent.

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Mr.Suresh Kumar for the Applicant.

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None for Respondent.

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CORAM : S.C. DHARMADHIKARI AND A.K. MENON, JJ. RESERVED ON : 25TH SEPTEMBER, 2014 PRONOUNCED ON : 9TH OCTOBER, 2014.

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P.C. :-

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The Tribunal has forwarded the following question of law for the opinion of this Court, which read as under:-

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“ Whether on the facts and in the circumstances of the case, the ITAT, relying on the decision of the Special Bench of ITAT in the case of Shri Chatrapati S.S.K. Ltd. (198 ITR 78-AT), was right in deleting the following additions by holding that the various funds / deposits collected by the assessee society out of the sugarcane

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purchase price payable to the case growers are not trading receipts of the assessee:

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Non-refundable deposit;

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Area development fund;

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Cane development fund;

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Chief Minister's Fund;

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Hutment fund;

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Small savings;

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Interest on deposits;

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Mr.Suresh Kumar, learned counsel for the applicant has invited our attention to the decision of this Court in Commissioner of Income Tax V/s. Malegaon Sahakari Sakhar Karkhana Ltd. reported in [2005] 279 ITR 19 (Bom.) in which all the aforesaid items were considered in accordance with the decision in Malegaon Karkhana (supra).

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We hold that the Tribunal was right in refusing to add Non refundable deposits, Interest on deposits, Chief Minister's Fund, Small savings as trading receipts of the assessee and accordingly, we answer the question relating to Non refundable deposits, Interest on deposits, Chief Minister's Fund, Small savings in favour of the assessee and against the revenue.

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As regard the Area development fund, we remand the question to the Tribunal for consideration in view of the judgment of this court in Malegaon Karkhana (supra).

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As regards Cane Development Fund it should be treated as income of the assessee and we answer the question in the negative i.e. in favour of the revenue and against the assessee.

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The Reference is disposed of in the above terms. No order as to costs.

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A.K. MENON, J .) ( S.C.DHARMADHIKARI, J .)

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The C.I.T.Kolhapur. v. Vasantdada Shetkari S.S.K.Ltd.

Case brief

What is this about?

What did the court decide?

The C.I.T.Kolhapur. v. Vasantdada Shetkari S.S.K.Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

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