Partly allowed

The C.I.T.Nashik v. Samarth S.S.K.Ltd.

Bombay HC13 Oct 2014ITR/886/1998

Case brief

AI extract

What is this about?

The High Court in Income Tax Reference No. 886 of 1998 answered substantial questions on taxation of specific funds. The Court upheld the deletion of additions for Non-refundable, CM's Relief, Hutment, and Education funds. It upheld the addition for Cane Development Fund. The question regarding Area Development Fund was remanded to the Tribunal per the SC decision in Siddheshwar Sahakari Sakhar Ka

What did the court decide?

As laid down in para 3 and 4; Area Development Fund question remanded.

The C.I.T.Nashik Vs Samarth S.S.K.Ltd. — Income Tax | Bombay HC (2014)

2.itr886.98

sbw

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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INCOME TAX REFERENCE NO.886 OF 1998

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The Commissioner of Income Tax ..Appellant

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Versus - Samarth Sahakari Sakhar Karkhana Ltd. ..Respondent

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Mr. Suresh Kumar for the Revenue.

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Mr. Mihir Naniwadekar for the Assessee.

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CORAM: S.C. DHARMADHIKARI AND

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A. K. MENON, JJ.

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DATE :- 13^th OCTOBER, 2014

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P.C.:

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1] The Tribunal has forwarded the following substantial question of

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law for the opinion of this Court:-

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“Whether on the facts and in the circumstances of the case, the Tribunal, relying on the decision of its Special Bench in the case of Shri Chhatrapati SSK Ltd. (198 ITR 78-AT), was right in deleting the following additions by holding that various funds/deposits, collected by the assessee society out of sugarcane purchase price payable to the cane growers, are not trading receipts of the assessee;

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Non refundable deposits Rs.8,35,922/2. C.M's fund Rs.1,72,894/3. Hutment Fund Rs.88,447/4. Cane Development Fund Rs.6,91,577/-

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Matsyadari Shikshan Sanstha Education fund Rs.2,93,452/6. Area Development Fund Rs.8,64,472/-”

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2] As regards Non Refundable Deposits, Chief Minister's Relief Fund,

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2.itr886.98

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Hutment Fund, these are correctly deleted by the Tribunal and, hence, following the decision of this Court in Commissioner of Income Tax V/s. Malegaon Sahakari Sakhar Karkhana Ltd. reported in (2005) 279 ITR

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19 (Bom) , we hold that the Tribunal was right in deleting the said additions.

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3] As regards Education Fund, the same is already covered in the decision of this Court in the case of Commissioner of Income Tax V/s. Krishna Sahakari Sakhar Karkhana reported in 229 ITR 577. The question in relation to the above set out items are answered in favour of the Assessee and against the Revenue.

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4] Cane Development Fund has been held to be income of the Karkhana and hence, the addition of the same by the Tribunal is correct. The question in relation to Cane Development Fund is answered in favour of the Revenue and against the Assessee.

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5] In accordance with the decision of the Hon'ble Supreme Court in the case of Siddheshwar Sahakari Sakhar Karkhana reported in (2004) 12 SCC 1 , the question whether Area Development Fund is to be included as a trading receipt, is remanded to the Tribunal for re-consideration. 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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wadhwa

The C.I.T.Nashik v. Samarth S.S.K.Ltd.

Case brief

What is this about?

What did the court decide?

The C.I.T.Nashik v. Samarth 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

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