TMI Blog1998 (4) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Pondicherry, is a private limited company carrying on business in the manufacture and sale of sugar. The assessment years involved are 1978-79 to 1981-82 for which accounting years ended on June 30, 1977, June 30, 1978, June 30, 1979 and June 30, 1980 respectively. The assessee, inter alia, claimed the amount set apart for the construction of molasses storage tank, as a deduction in compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wnership of the income or the asset created. Therefore, the amount set apart for these years were added back as income. On appeal, the claim of the assessee was allowed by the Commissioner of Income-tax (Appeals), by following the order of the Tribunal in the assessee's own case for the assessment year 1977-78 in ITA No. 1244/Mad of 1980, dated July 7, 1981. On appeal by the Revenue, the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. P. P. S. Janarthana Raja, learned counsel representing Subbaraya Aiyar, learned counsel appearing for the respondent were heard. An identical question like the one in the instant case arising for consideration came up for consideration before a Division Bench of this court in CIT v. Salem Co-operative Sugar Mills Ltd. (1998] 229 ITR 285. In that case, the assessee was a co-operative socie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see claimed as deduction in the computation of its total income for the assessment year 1975-76. The Tribunal allowed the appeal. On a reference, a Division Bench of this court held that even before collection of the amount as directed by the Central Government under the Molasses Control (Amendment) Order, the assessee was directed to keep this amount under a separate account under the head "Mol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee's total income. In the face of the decision in the case of Salem Co-operative Sugar Mills Limited [1998] 229 ITR 285 (Mad), it goes without saying that the Tribunal was right in holding that the amount set apart towards molasses storage reserve fund should be excluded from its total income as revenue expenditure. This question is, therefore. answered against the Revenue and in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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