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TMI Blog2025 (3) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... oring the fact that the Hon'ble ITAT vide various decisions has restored the issue to the file of the AO. 2. On facts and in the circumstances of the case and in law, the ld.CIT(A) erred in not appreciating the fact that in assessee's own case for AY 2015-16, the Hon'ble ITAT has restored the issue to the file of AO by following the Coordinate Bench of Pune Tribunal's decision in the case of Shri Adinath SSK Vs. ACIT, which in turn has relied on the coordinate bench of Tribunal in the case of ACIT Vs. Shri Shankar SSK Ltd. 3. On facts and in the circumstances of the case and in law, the ld.CIT(A) erred in not appreciating the fact that, coordinate Bench of Tribunal in the case of ACIT Vs. Shri Shankar SSK Ltd. has duly considered both the cases as relied upon by the CIT(A) viz. the decision of Hon. ITAT in the case of Chhatrapati Shahu SSK and decision of Hon. Bombay HC in the case of CIT Vs. Terana SSK and then only restored the issue of sale of sugar to members at concessional rate to the file of the AO. 4. The appellant craves leave to add, alter, amend and modify any of the above or all grounds raised at time of proceedings before the Hon'ble Tribunal which may please be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 01.02.2010. 3.1 Ld.AR submitted that the issue had attained finality by Hon'ble Bombay High Court's order in assessee's own case in Income Tax Appeal(Lodg.) No.2726 of 2009, dated 01.02.2010 vide which Hon'ble Bombay High Court dismissed the appeal of the Revenue. Ld.AR further submitted that Revenue has not filed any SLP against the decision of Hon'ble Bombay High Court regarding sale of sugar at concessional rate. Therefore, ld.AR pleaded that this issue has attained finality for the assessee. Findings & Analysis : 4. We have heard both the parties and perused the records. With the consent of both the parties, these appeals were heard together as the issue involved is same, grounds of appeal raised are same. We took appeal for A.Y.2007-08 as lead appeal. 4.1 Assessee is a Co-operative Society. Assessee filed Return of Income on 30.10.2007 disclosing total income at Rs. NIL and claiming carry forward losses of earlier years of Rs. 7,64,55,198/-. Then, assessee filed a revised Return of Income on 26.03.2009 increasing the losses to Rs. 7,82,30,508/-. The Assessee's case was selected for scrutiny. The assessment order under section 143(3) was passed on 30.10.2009 making an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cases. The Assessing Officer in assessment order for A.Y.2007-08 dated 28.09.2021 has referred wrong ITA Appeal Numbers. The ITAT vide its common order 14.03.2019, 01.05.2019 and 01.10.2019set-aside the issue to the Assessing Officer, following the decision of Hon'ble Supreme Court in the case of CIT Vs. Krishna Sahakari Karkhana Limited [2012] 27 taxmann.com 162 (SC) order dated 25.09.2012. The ITAT directed Assessing Officer to verify following aspects : * Whether practice of selling sugar at concessional rate is a custom in the Co-operative Sugar Industry! * Whether any resolution has been passed by State Government supporting the practice! * What is the basis of quantity fixed for sale at concessional rate? 4.5 The ld.Assessing Officer in his order dated 28.09.2021 for A.Y.2007-08 has reproduced the above mentioned directions, however, ignored to follow the direction. The Assessing Officer has not bothered to give finding on any issue mentioned by ITAT for which it was set-aside. The relevant paragraph 6 of the Assessing Officer is reproduced here as under : "6. Disallowance on account of sale of sugar at concessional rate During the year, assessee society had sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 4.9 It is noted that ld.AR submitted that it is a customary practice to sale sugar at concessional rate to the Farmers who sell sugar cane to Assessee. Ld.AR further submitted that this is a practice followed by all sugar factories. Ld.AR also submitted that Assessee has passed a resolution to that effect. Ld.AR filed copy of the resolution dated 14.02.1990 in paper book. As per the said resolution of the Assessee-Factory, concessional sugar is given only to the members. Therefore, Assessee has not explained how concessional sugar has been provided to non-members. Ld.AR also submitted that even State Government has approved the said practice. Ld.DR has not rebutted these submissions of the ld.AR. We have observed that indeed it is a customary practice among all sugar factoriesin this belt to sale sugar at concessional rate to Farmers. However, nowhere the exact number of members to whom sugar has been sold at concessional rate is mentioned by the Assessee. The said fact has not been mentioned by the Assessee even in the paper book filed before us. Also, Assessee has not mentioned to how many non-members sugar was sold at concessional rate and how concessional sugar was provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the sale of sugar at concessional rate and given directions. The said circular is reproduced as under : "Commissioner of Sugar Maharashtra Rajya SakharSankul, Shivaji Nagar, Pune-5 Outward No:CS/Admin-1/Circular/05 Date:01st Date March, 2006 CIRCULAR Sub: Sale of Sugar at concessional rate to members and employees of sugar factories of State To give directions as per section 79A of the Maharashtra Co-operative Societies Rules, 1960 Ref: Govt. Letter SSK1005/25859/Letter No. 345/25S dated 14th February, 2006 Terms and conditions and procedure to be followed for sale of sugar at concession rate was fixed through Circular from this office dated 13th April, 2005 and 27th May, 2005. However, some of the factories have informed to this office that they have passed the resolution at their Annual General Meeting/ Extra Ordinary General Meeting regarding not to adopt the provisions contained in this circular on sale of sugar factories are informed that Circular was issued u/s 79A of the Maha. State Co-op Act 1960 pursuant to the decision taken at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 4.12 The Sugar Commissioner Maharashtra Government gave the directions to all sugar factories as per Section 79(A) of Maharashtra Co-operative Societies Act, 1960. The Sugar Commissioner gave the direction that Sugar Factories shall sale maximum 5 kgs of sugar per month at concessional rate to its members only. The rate shall be @ levy sugar (+) excise duty. The sale of sugar at concessional rate shall be applicable only to those members who have supplied their Sugar Cane to the factory. 4.13 The Hon'ble Supreme Court in the case of Krishna SSK Ltd.,(supra) had set-aside the issue with specific direction. Accordingly, ITAT had directed Assessing Officer to verify the issue as per the directions of Hon'ble Supreme Court. One of the Directions of Hon'ble Supreme Court(supra) was to find out whether any resolution passed by State Government. Therefore, the Circular issued by Sugar Commissioner, Maharashtra State in 2006 needs to be considered as directed by Hon'ble Supreme Court(supra). In 2006, the Sugar Commissioner gave specific directions under section 79(A) of the Maharashtra Co-operative Societies Act, 1960. We have already reproduced the relevant paragraphs of the Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the term of his office and declare him to be disqualified to be such member for a period of six years from the date of the order, (b) if the person is an employee of the society, direct the committee to remove such person from employment of the society forthwith, and if any member or members of the committee, without any good reason or justification, fail to comply with this order, remove the members, appoint other persons as members and declare them disqualified as provided in clause (a) above: Provided that, before making any order under this sub-section, the Registrar shall give a reasonable opportunity of being heard to the person or persons concerned and consult the federal society to which the society is affiliated, Any order made by the Registrar under this section shall be final." 4.14 Thus, the Commissioner of Sugar had issued Circular dated 01.03.2006 in public interest. One arm of the Law cannot be used to defeat purpose of another arm of the Law. In this case, the Assessing Officer has not analysed and brought on record all the above details, which was mandatory in the light of decision of Hon'ble Supreme Court in the case of Krishna SSK Ltd.(supra). 4.15 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Karkhana Ltd(supra) decided the appeal in February, 2006 when this circular of Commissioner of Sugar Maharashtra State, dated 01.03.2006 was not applicable. Therefore, the Hon'ble Bombay High Court's decision in the case of Terana SSK Ltd.,(supra) is distinguishable on facts and hence not applicable in the case of assessee. Therefore, ld.CIT(A) has erred in deciding the appeal following Hon'ble Bombay High Court's decision in Terana SSK Ltd and not referring to the decision of Hon'ble Supreme Court in the case of Krishna SSK Ltd.,(supra). Ld.CIT(A) erred in not appreciating the fact that this was the Assessment Order in consequence to ITAT Decision in the case of Assessee, wherein ITAT had given certain specific directions following the Hon'ble Supreme Court's decision in the case of Krishna SSK Ltd.,(supra). Therefore, ld.CIT(A) should have restricted to the ITAT's order only. 4.19 The ld.AR relied on the order of Hon'ble Bombay High Court in the case of CIT Vs. Tatyasaheb Kore Warana Sahakari Sakhar Karkhana Ltd., in Income Tax Appeal(Lodg.) No.2726 of 2009, dated 01.02.2010.The Hon'ble Bombay High Court in the case of CIT Vs. Tatyasaheb Kore Warana Sahakari Sakhar Karkhana Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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