TMI Blog2015 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ber in case of cessation of membership or to his legal heirs in case of death indicated that the deposited amount could not be treated as money belonging to the assessee-society. The payment of interest at a specified rate from year to year was consistent only with the fact that the deposited amount still belonged to the members. And the fact that the deposited amounts were credited to the individual accounts of the members corroborated the circumstance that the deposits belonged to the members. The amounts deducted from the cane price towards the non-refundable deposits were not trading receipts of the assessee. Thus in the present case non-refundable deposit received by the assessee is not revenue receipts, therefore, not exigible to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961. 2. During the course of hearing of the appeals, the ld. counsel for the assessee has invited our attention that the impugned issue is squarely covered in favour of the assessee by the order of the Lucknow Bench of the Tribunal in the case of ACIT, Sitapur vs. Kisan Sahkari Chini Mill ltd., Sitapur in I.T.A. No.303/LKW/2013 and the judgments of the Hon'ble Apex Court in the case of Siddheshwar Sahakari Sakhar Karkhana Ltd. vs. CIT, 270 ITR 1 and Hon'ble jurisdictional High Court in the case of CIT vs. Ramala Sahkari Chini Mills Ltd., 278 ITR 670. Therefore, following the aforesaid judgments, the appeals may be decided in favour of the assessee. The copies of the order of the Tribunal and the judgments of the Hon'ble Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial institutions for capital expenditure were repaid fully, (ii) the board of directors of the society may convert such deposits into shares after repayment of the loans taken towards capital expenditure and long term loans taken from banks for capital expenditure, (iii) the amount standing to the credit of a member could be transferred at his option to the account of another, (iv) after one year of his ceasing to be a member, the amount could be refunded to him subject to approval of the board, and (iv) on his death, the amount could be paid to his heirs with the approval of the board. Until repayment the deposits so collected were to be utilised for repaying the term loans taken for capital expenditure. Interest was payable on the depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude the issue, the expression was used in the bye-laws to mean just what it said. The repayment of loans taken for capital expenditure and the share capital of the Government were two specified events which were by no means uncertain, though the time of repayment was indefinite. On the occurrence of the two events the right to demand refund would accrue to the memberdepositor. Such a right, though contingent in nature initially, inhered in the depositor from the beginning. The word may in the bye-laws had to be construed as shall and the board was bound to allot shares to the members in relation to the deposits, after full repayment to the Government and the financial institutions. The existence of the other features such as transferabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India Ltd. It had entered into a mortgage deed with the ICICI, according to which, it undertook to collect nonrefundable deposits from the grower members at a minimum rate of ₹ 7.50 per tonne of sugarcane supplied by them. These deposits were not to bear any interest. As per clauses 41, 42, 43 and 44 of the bye-laws of the assessee as approved by the U. P. Government, the deposits were finally to be converted into the shares in the assessee in the names of their respective members and in case after the issue of shares as per clause 28(kha) of the bye-laws there remained any surplus it had to be refunded to the parties concerned. During the assessment year 1981-82 the assessee received a sum of ₹ 4,32,685 from the cane gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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