Allowed

Padmashree Dr. Vithalrao Vikhe Patil Sahakari v. the Deputy Commissioner of Income Tax and Anr.

Bombay HC25 Mar 2015TA/19/2003

Case brief

AI extract

What is this about?

The High Court doubted the Tribunal's reliance on an earlier judgment finding non-refundable deposits taxable, citing a Supreme Court decision that excluded such deposits from income. The court quashed the Tribunal's order allowing the Department's appeal and upheld the Commissioner's order against the assessee.

What did the court decide?

The Tribunal's judgment and order allowing the Department's appeal were quashed; the Commissioner's order was upheld; no costs.

Padmashree Dr. Vithalrao Vikhe Patil Sahakari Vs the Deputy… — Income Tax | Bombay HC (2015)

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ta19.03

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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BENCH AT AURANGABAD

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TAX APPEAL NO.19 OF 2003

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Padmashree Dr. Vithalrao Vikhe Patil
Sahakari Sakhar Karkhana Limited
at Pravarangar, Tq-Rahata,
Dist-Ahmednagar,
Through its Managing Director,
Mr. Vasantrao Sakharam Gunjal

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...APPELLANT

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 VERSUS

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1) The Deputy Commissioner of Income-tax, SH-3, Nashik,

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2) Deputy Commissioner of Income-tax, Special Range-II, Aurangabad. ...RESPONDENTS

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...

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 Mr. V.D. Hon, Senior Counsel for Appellant.
 Mr. Alok Sharma, Standing Counsel for
 Respondents.

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...

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CORAM: S.V. GANGAPURWALA AND

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 A.I.S. CHEEMA, JJ.

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 DATE : 25TH MARCH, 2015

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ta19.03

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ORAL ORDER :

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1.Mr. Sharma, the learned counsel for
Respondents submits that the non-refundable
deposits and interest on the non-refundable
deposits is an income. The Tribunal had rightly
considered the said aspect and allowed the Appeal
filed by the Department. According to the learned
counsel, the Tribunal rightly relied on the
Judgment of this Court in a case of Commissioner
of Income Tax vs. Chhatrapati Sahakari Sakhar
Karkhana Ltd. & Rahuri Sahakari Sakhar Karkhana
Ltd., reported in (2000) 245 I.T.R. 498. According
to the learned counsel, when the non-refundable
deposit has been held to be an income and as such
interest on it also would be taxable. Non-
refundable deposit and interest on it cannot be

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deleted and the same have to be added to the
income.

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Mr. Hon, learned senior counsel for

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2.

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ta19.03

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Appellant relies on the Judgment of the Apex Court
in a case of Siddheshwar Sahakari Sakhar Karkhana

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Limited vs. C.I.T. Kolhapur, reported in 2004(12)
S.C.C. 1. According to the learned senior counsel,
the non-refundable and refundable deposit cannot
be treated as the income of the assessee society.

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3.We have considered the submissions
canvassed by the learned counsel for the
respective parties. The Tribunal relied on the
Judgment of this Court in a case of Commissioner

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of Income Tax vs. Chhatrapati Sahakari Sakhar

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Karkhana Ltd., referred supra. However, in a
subsequent Judgment in a case of Siddheshwar

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Sahakari Sakhar Karkhana Limited vs. C.I.T.
Kolhapur, referred supra, the Apex Court has
observed in Para 51 thus:-

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“51. For the aforesaid reasons we conclude
that the non-refundable and refundable
deposits cannot be treated as the income of
the assessee- Societies. The Civil Appeals

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ta19.03

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filed by the assessees/Co-operative Sugar
Factories are allowed without costs.

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.It has been held by the Apex Court that
such deposits are akin to the transaction of loan
and liable to be excluded from taxable income.

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4.In light of the above, the impugned

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Judgment and Order passed by the Tribunal is

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quashed and set aside and the order of the

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Commissioner is upheld. Appeal accordingly

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allowed. No costs.

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[A.I.S.CHEEMA,J.] [S.V.GANGAPURWALA,J.]
asb/MAR15

Padmashree Dr. Vithalrao Vikhe Patil Sahakari v. the Deputy Commissioner of Income Tax and Anr.

Case brief

What is this about?

What did the court decide?

Padmashree Dr. Vithalrao Vikhe Patil Sahakari v. the Deputy Commissioner of Income Tax and Anr.

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

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