ITO Vs Cooperative Cane Development Union Ltd (ITAT Lucknow)
ITAT Lucknow held that commission earned by Cane Development Councils or Cooperative Cane Development Unions from sugar mills on supply of sugar cane is business income and hence eligible for deduction under section 80P of the Income Tax Act.
Facts- Revenue has preferred the present appeal mainly contesting that whether the Ld. CIT(A) was right, without giving a finding of facts, of efforts made in earning “commission” from sugar mills on sugarcane independently supplied by sugarcane growers in catchment area to sugar mills at rates determined by the state government, to conclude that such receipts were “business” receipts and whether the Ld. CIT(A) was right in directing deduction under section 80P in respect of such gross receipts from sugar mills, especially without giving finding of fact that such receipts were duly earned as business receipts.
Conclusion- Held that the Revenue is not justified in contending that he has not given a finding on the nature of the Commission received by the Assessees. We, therefore, uphold the decision of the ld. CIT(A) to allow the same to be deducted under section 80P as they are receipts from the business and not income from other sources. Accordingly, all the appeals of the Revenue, which do not seem to have taken cognizance of the assigned roles of the Cane Development Councils or Cooperative Cane Development Unions in the production of marketing of cane as per the U.P. Sugarcane (Regulation of Supply & Purchases) Act, 1953 read with the U.P. Sugarcane (Regulation of Supply & Purchases) Rules, 1954, are fit to be dismissed.
