9911796707
Advanced Search 
TMI Blog2015 (5) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed decision of ITAT, Madras in the case of DCIT vs. Bannari Amman Sugar Ltd. Coimbtore in ITA No. 3434/mds/89 and 2304/mds/92 having identical facts in the present case holding. 2. The facts in brief are that the Co-ordinate Bench of this Tribunal (ITAT, Delhi Benches 'B' Bench), New Delhi vide its order dated 10.8.2006 in ITA No. 128/Del./2003 has set aside the order of the CIT(A) dated 25.9.2002 for the asstt. Year 1994-95 restoring the matter back to him for examination of the issue properly after taking into account conditions of the concerned scheme as well as extension of the scheme to the relevant assessment year. The Ld. CIT(A) perused the said order along with the ld CIT(A)'s order dated 25.9.2002 and assessment order passed u/s. 143(3) of the Income Tax Act, 1961 (herein after 'the Act') dated 05.03.2002. Ld. CIT(A) has observed that his predecessor vide his order dated 25.9.2002 has discussed the reasons behind addition of Rs. 99,90,603/- on account of valuation of closing stock of sugar and addition of Rs. 27,480/- on account of valuation of stock of sugar in process or work in progress (WIP). 2.1 In this case the assessee is engaged in the production and manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the rulings of Hon'ble Courts including the one by the Hon'ble Supreme Court in the case of State Bank of Travancore vs. CIT 158 ITR 102 and the decision of Madras Bench of the Tribunal in DCIT vs. Bannari Sugar Ltd. Coimbatore in ITA Nos.3434/Mds/89 and 2304/Mds/92. As regards the decision of Hon'ble Supreme Court, the Id. CIT(A) in his order dated 25.09.2002 distinguished the issue involved in the present case being different from the cited case dealt with by the Hon'ble Apex Court. It is also to be noted that the predecessor CIT(A) in his order dated 25.09.2002 has rejected the method adopted by the appellant by following the order of the ITAT In the case of Kisan Sahkari Chinni Mills Ltd. Pooranpur vs. DCIT rendered in ITA No. 531/Alld./94 dated 23.9.2004. Ld. CIT(A) has noted that one of the arguments of the appellant before the predecessor CIT(A) was that the Incentive Scheme had expired on 30.09.1992 and, therefore, he was required to bifurcate the closing stock of sugar between free sale quota and levy sale quota. However, as is evident from the entitlement certificate issued by the Directorate of Sugar, the Incentive Scheme was extended up to sugar year 1996 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in the case of CIT, Coimbatore vs. M/s Bannari Amman Sugars Ltd. Decided in Civil Appeal No.7014 of 2012 (Arising out of SLP (C) No. 9263 of 2009) vide its judgment dated 26.9.2012, as the facts and circumstances are identical to the present case. In this behalf, he also filed the copy of the aforesaid judgment of the Hon'ble Apex Court dated 26.9.2012. 5. We have heard both parties and perused the relevant records and case law cites before us. We find considerable cogency in the contention of the assessee's counsel that the facts and circumstances of the present case are identical to the facts and circumstances of the case dealt by the Hon'ble Supreme Court in the case of CIT, Coimbatore vs. M/s Bannari Amman Sugars Ltd. decided in Civil Appeal Nol. 7014 of 2012 (Arising out of SLP (C) No. 9263 of 2009) vide its judgment dated 26.9.2012 wherein the Hon'ble Apex Court has adjudicated the matter as under:- " Leave granted. This batch of civil appeals is filed by the Department. The said batch concerns assessment years 1992-93, 1993-94, 1994-95, 1996-97 and 1997-98. The following question arises for determination these civil appeals:- "Whether on the facts and in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ization towards repayment of loans, the sugar mills were directed to file certificate of chartered accountant subject to which further release orders would be issued by the Directorate of Sugar. Thus Scheme carne up for consideration before this Court in me vase of C.I.T. vs. Ponni Sugars and Chemicals Ltd. [306 ITR 392] in which this Court held that the: excess amount realized by the manufacturer over the levy price by sale of incentive sugar should be treated as a capital receipt which was not taxable under the Income Tax Act, 1961. In that case one of the arguments advanced on be-half of the Department, as in this case, was that the excess amount realized by the manufacturer over the levy price should be treated as a revenue receipt. However, that contention of the Department in Panni Sugars and Chemicals Ltd. (supra) was negatived although in the context of another Scheme this Court after examining the Scheme In the case of Sahney Steel and Press Works Ltd. vs. CIT [228 ITR 253] held that the excess amount realized was a revenue receipt. The judgment in Sahney Steel and Press Works Ltd supra: was considered in Ponni Sugars and Chemicals Ltd. (supra). Applying the "purpose test" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in valuing the closing stock at levy price. As stated, in certain cases, adjustments may have to be made having regard to the special character of assets, the nature of the business, the appropriate allowances permitted etc. in order to arrive at taxable profits. The position would have been different, if as in the case of Sahney Steel and Press Works Ltd. (supra) this Court on examination of the relevant scheme in question held that such excess amount was a revenue receipt. This judgment, therefore, is confined to the Sampat Committee Report which has provided incentives in the form of price and duty differentials [see para 13 of the Judgment in Ponni Sugars and Chemicals Ltd. (supra)]. In the present case, if the closing stock of Incentive sugar was to be valued at any figure, above the levy price, the direct consequence of such a valuation would have been that the excess amount over the levy price would be reflected as part of business income which would run counter to the judgment of this Court in Ponni Sugars and Chemicals Ltd. (supra.) We must keep in mind that the stock valuation of incentive sugar has a direct impact on the manufacturer's revenue or business profits. If w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
