1. Heard learned counsel on both sides.
2. Delay condoned.
3. Leave granted.
4. The assessee(s) is a Co-operative Society engaged in the business of production of sugar from sugarcane and sale thereof. Assessee(s) buys sugarcane from its Members. Every month and on Diwali, assessee(s) sells certain quantity of sugar (final product) at concessional rate to farmers/cane growers/Members. The difference between the average price of sugar sold in the market and the price of sugar sold by the assessee(s) to its Members at concessional rate is sought to be taxed by the Department under the Head Appropriation of Profit.
5. The question, whether the above difference between the fair market price and the concessional price should or should not be added to the total income of the assessee(s) Society, needs to be re-looked by Commissioner of Income Tax (Appeals) (for short, CIT (A)).
6. Apart from the afore-stated question, CIT (A) would take into account, whether the above-mentioned practice of selling sugar at concessional rate has become the practice or custom in the Co-operative Sugar Industry; and whether any Resolution has been passed by the State Government supporting the practice The CIT (A) would also consider on what basis the quantity of the final product, i.e., sugar, is being fixed for sale to farmers/cane growers/Members each year on month-to-month basis, apart from Diwali
7. These are some of the questions which have not been addressed by the Authorities below in the impugned orders. The CIT (A) would be entitled to look into the Accounts and verify the basis for sale of sugar at concessional price on month-to-month basis. We, therefore, keep all questions of law and facts open.
8. Needless to add, the CIT (A) would give liberty to both sides to produce relevant documents.
9. For the above reasons, we remit the cases to CIT (A) to de-novo consider the matter.
10.. Accordingly, these civil appeals filed by the Department are disposed of with no order as to costs.
Commissioner Of Income Tax v. Krishna Sahakari Sakhar Karkhana Ltd
Commissioner Of Income Tax v. Krishna Sahakari Sakhar Karkhana Ltd
(Supreme Court Of India)
Civil Appeal No. 6949 Of 2012 (Special Leave Petition (Civil) No. 8590 Of 2010) With Civil Appeal No. 6950-6993 Of 2012 & Civil Appeal No. 4443 Of 2011 | 25-09-2012
Advocate List
- For the Petitioner R.P. Bhatt, Sr.Advocate, Arijit Prasad, Rahul Kaushik, Yatinder Chaudhary, Vikas Malhotra, Anil Gaur, C.V.S. Rao, Gargi Khanna, Anil Katiyar, B.V. Balaram Das, Advocates. For the Respondent Shekhar Naphade, Sr. Advocate, Chinmoy Khaladkar, Vimal Chandra S. Dave, Advocates.
Bench
- HON'BLE CHIEF JUSTICE MR. S.H. KAPADIA
- HON'BLE MR. JUSTICE MADAN B. LOKUR
Eq Citations
- (2013) 11 SCC 350
- [2012] 211 TAXMAN 109 (SC)
- LQ/SC/2012/848
Head Note
Income Tax — Cooperative Society — Appropriation of Profit — Assessee, a Cooperative Society engaged in the business of production of sugar from sugarcane and sale thereof — Difference between the average price of sugar sold in the market and the price of sugar sold by the assessees to its Members at concessional rate sought to be taxed by the Department under the Head Appropriation of Profit — Question whether the above difference between the fair market price and the concessional price should or should not be added to the total income of the assessees Society needs to be relooked by Commissioner of Income Tax Appeals for short CIT A — Apart from the aforestated question, CIT A would take into account whether the abovementioned practice of selling sugar at concessional rate has become the practice or custom in the Cooperative Sugar Industry and whether any Resolution has been passed by the State Government supporting the practice — CIT A would also consider on what basis the quantity of the final product ie sugar is being fixed for sale to farmerscane growersMembers each year on monthtomonth basis apart from Diwali — These are some of the questions which have not been addressed by the Authorities below in the impugned orders — CIT A would be entitled to look into the Accounts and verify the basis for sale of sugar at concessional price on monthtomonth basis — All questions of law and facts kept open — CIT A would give liberty to both sides to produce relevant documents — Cases remitted to CIT A to denovo consider the matter — Specific Relief Act, 1963 — S. 34 — Constitution of India — Art. 136 — Remission
