Shri Vithal Sahakari Sakhar Karkhana Ltd. Vs ITO (ITAT Pune)
The assessee, engaged in the business of manufacturing and sale of sugar, appealed against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2014-15, raising issues relating to disallowance of sale of sugar at a concessional rate, VSI contribution, and disallowance under Section 80P(2)(d). At the outset, both parties submitted that the issues had already been decided by the Co-ordinate Bench in the batch of appeals led by Majalgaon Sahakari Sakhar Karkhana Ltd. v. ACIT. On the issue of concessional sale of sugar, the Tribunal noted that the Co-ordinate Bench had relied on the Supreme Court’s decision in CIT v. Krishna Sahakari Sakhar Karkhana Ltd., which required examination of whether the practice of selling sugar to members at concessional rates constituted appropriation of profit in light of specified factors. Following the earlier decision, the Tribunal restored the issue to the Assessing Officer for fresh adjudication after providing the assessee a reasonable opportunity of hearing. Regarding VSI contribution, the Tribunal observed that the Co-ordinate Bench had consistently allowed the claim by following Bhima S.S.K. Ltd., and as no material was placed to show that the decision had been reversed or modified by the High Court, it decided the issue in favour of the assessee. As regards the deduction under Section 80P(2)(d), the Tribunal noted that the assessee had claimed deduction in respect of interest received from Bank of India, which was not allowable under the provision, and that the ground had not been pursued before the CIT(A). Finding no infirmity in the Assessing Officer’s order, it upheld the disallowance. The assessee also chose not to press another ground, which was dismissed accordingly. The appeal was partly allowed.
