Kisan Sahkari Chini Mill Ltd., Sitapur vs Department Of Income Tax

Dy.C.I.T., Vs Kisan Sahkari Chini Mill Ltd., Sitapur. Sampurnanagar, Lakhimpur Kheri. PAN:AAAAK1131D (Appellant) (Respondent)

Appellant by Shri K. K. Upadhyay, D. R. Respondent by Shri S. K. Arora, C.A. Date of hearing 06/01/2015 Date of pronouncement 12/02/2015

ORDER

PER A. K. GARODIA, A.M.

This is Revenue's appeal directed against the order passed by learned CIT(A), Bareilly dated 28/05/2014 for the assessment year 2009- 2010.

2. Ground No. 1 of the appeal is as under:

"1. That the learned Commissioner of Income Tax (Appeals), Bareilly has erred in law and on facts in deleting sales of press mud amounting to Rs.52,826.66 which has rightly been added by the Assessing Officer to the total income of the assessee."

3. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is squarely covered in favour of 2

the assessee by the Tribunal decision in assessee's own case for assessment year 2006-07, 2007-08 and 2008-09 in I.T.A. No.406 to 409/Lkw/13 dated 29/11/2013. He further submitted that copy of the Tribunal decision is available on page No. 39 to 44 of the paper book. In particular, our attention was drawn to Para No. 12 of this Tribunal decision.

4. We have considered the rival submissions. We find that in the assessee's own case for various earlier assessment years, the issue was decided by the Tribunal in favour of the assessee and no difference in facts could be pointed out by Learned D.R. of the Revenue. Hence, we do not find any reason to take a contrary view in the present year. Therefore, respectfully following the Tribunal decision, we decline to interfere in the order of CIT(A) on this issue. Ground No. 1 is rejected.

5. Ground No. 2 & 3 are as under:

"2. That the learned Commissioner of Income Tax (Appeals), Bareilly has erred in law and on facts in deleting the disallowance rightly made by the Assessing Officer towards payment of subscription to Federation under section 40(a)(ia) of the I.T. Act, 1961 at Rs.58,87,238/-.

3. That the learned Commissioner of Income Tax (Appeals), Bareilly has erred in law and on facts in deleting the disallowance rightly made by the Assessing Officer towards Molasses at Rs.3,68,29,9347-."

6. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A).

7. We have considered the rival submissions. We find that this issue was decided by the Assessing Officer against the assessee with the observation that the assessee has debited Rs.3,68,29,934/- in the account 3

of molasses. Sugarcane is not raw material for distillery unit. It is further noted that the sugarcane is raw material for sugar unit. It is held by him that since the assessee has debited cost of cane in the molasses account of distillery unit, the same is not allowable. This disallowance was deleted by CIT(A) on the basis that the assessee has debited Rs.5542.52 on account of cost of sugarcane crushed and Rs.368.30 lac on account of cost of molasses consumed for distillery unit, total of which is Rs.59,10,81,717/- He has further noted that this total amount has been shown as cost of cane in the consolidated financial statement and thereafter, he has decided the issue in a very cryptic manner that the addition as made by the Assessing Officer is not maintainable and the same is deleted. In our considered opinion, the issue should have been decided by CIT(A) by way of reasoned and speaking order. Therefore, we feel it proper that this issue should go back to CIT(A) for fresh decision. Hence, we set aside the order of earned CIT (A) on this issue and restore the matter back to him for fresh decision. If consumption of molasses is taken in distillery unit then corresponding income should be accounted for in sugar unit. The assessee should bring the evidence in support of this before CIT(A) and if it is found that the molasses consumption shown in distillery unit of Rs.368.30 lac has been credited as income in sugar unit then no disallowance is called for. The CIT(A) should decide the issue afresh after providing reasonable opportunity of being heard to both sides. This ground is allowed for statistical purposes.

8. Ground No. 4 is as under:

"4. That the learned Commissioner of Income Tax (Appeals) has erred in law and on fact in deleting the addition rightly made by the Assessing Officer towards the Baggase at Rs.4,31,87,299/-."

4 9. Learned D. R. of the Revenue supported the assessment order whereas learned A. R. of the assessee supported the order of learned CIT(A). He also submitted a copy of the Tribunal decision in the case of DCIT vs. Kisan Sahkari Chini Mill Ltd. Mahmoodabad, Sitapur in I.T.A. No.621/Lkw/2013 dated 27/11/2014. He drawn our attention to Para 5 of this Tribunal order and submitted that this issue is covered in favour of the assessee by this Tribunal decision.

10. We have considered the rival submissions. The relevant Para No. 5 of the Tribunal decision is reproduced below for the sake of ready reference:-

"5. Apropos ground No.3, our attention was invited to the fact that this issue was decided by the ld. CIT(A), following the order of the ld. CIT(A) pertaining to assessment year 2006-07 and in assessment year 2006-07 the Revenue has filed an appeal before the Tribunal and they have not challenged the deletion of addition made on account of Baggase before the Tribunal. The order of the Tribunal is placed on record in which no ground is raised in this regard. Therefore, the order of the ld. CIT(A) relating to deletion of addition on account of Baggase attained finality. Since the order of the ld. CIT(A) is in consonance with the order of the ld. CIT(A) in earlier year which has attained finality, there is no infirmity in the order of the ld. CIT(A) and it deserves to be confirmed."

11. From the above Para of the Tribunal decision, it is seen that in this case, the issue was decided by the Tribunal on the basis that in assessment year 2006-07, the issue has attained finality because no appeal was filed by the Revenue before Tribunal and therefore, the same issue cannot be agitated again by the Revenue before the Tribunal in assessment year 2009-10. In the present case also, the decision of CIT(A) is on the basis that in the case of Kisan Sahkari Chini Mill in assessment year 2006-07, the issue was decided by the CIT(A) in favour of the assessee and no appeal 5

has been filed by the Revenue before the Tribunal in that year on this issue. Hence, it is seen that the facts in the present case are identical and therefore, respectfully following this Tribunal decision, we decline to interfere in the order of CIT(A) on this also. Ground No. 4 is rejected.

12. In the result, the appeal of the Revenue is partly allowed for statistical purposes.

(Order was pronounced in the open court on the date mentioned on the caption page)

Sd/. Sd/.

(SUNIL KUMAR YADAV) ( A. K. GARODIA ) Judicial Member Accountant Member

Dated:12/02/2015 *C.L.Singh

Copy of the order forwarded to : 1.The Appellant 2.The Respondent. 3.Concerned CIT 4.The CIT(A) 5.D.R., I.T.A.T., Lucknow Asstt. Registrar