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TMI Blog2008 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... tance of the Commissioner of Income-tax: "Whether the Appellate Tribunal is right in law and on facts in confirming the order made by the Commissioner of Income-tax (Appeals) deleting the addition of 6,02,03,652 representing the alleged additional price of milk, paid to the member co-operative societies on the last day of the accounting year?" 3. It is an admitted position between the parties that identical issue had come up in the assessee's own case for immediately preceding year and the issue now stands concluded by virtue of the judgment rendered in case of Commissioner of Income-tax Vs. Mehsana District Co-operative Milk Producers Union Ltd., [2006] 282 ITR 24 (Guj.). Hence, for the reasons stated in judgment rendered on 24.02.2005 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty derived or can derive profits from the transactions carried on by the society. For the purposes of constituting such a reserve fund, according to Mr. Shah, under sub-section (2) of Section 67 of the Co-operative Societies Act at least one-fourth of the net profits of the society are required to be carried to the reserve fund every year, but such reserve fund is not a free fund and hence, before the profits are transferred to the reserve fund at the appropriate rate there is a diversion at source by virtue of provisions of Section 67 of the Co-operative Societies Act which operates as an overriding title. Hence, it was submitted that the amount transferred to the reserve fund cannot be charged as income liable to tax under the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited attention to the Apex Court decision in the case of Associated Power Co. Ltd. Vs. Commissioner of Income-tax, [1996] 218 ITR 195, to submit that in similar situation, merely because there is a statutory liability to transfer a part of the profits neither can the profits be exempted from tax on the ground of diversion at source by overriding title nor can such amount be treated as a deductible expenditure. 8. Having heard the learned advocates it is apparent that the issue raised by the two questions, at the instance of the assessee, stands concluded by the aforesaid decision of the Apex Court in the case of Associated Power Co. Ltd. Vs. Commissioner of Income-tax [1996] 218 ITR 195. 9. Furthermore, as can be seen from provisions of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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