Commissioner of Income Tax vs Ratna Sugar Mills Co. Ltd.

The Income Tax Appellate Tribunal, Allahabad has referred the following question of law u/s 256(1) of the Income Tax Act, 1961, hereinafter referred to as the Act, for opinion to this Court:

Whether on the facts and in the circumstances of the case, the Tribunal wasjustified in holding that sum of Rs. 12,76,141 collected by the assessee on account of difference in price of levy sugar collected by the assessee pursuant to interim order dated 6-2-1980 passed by the Hon''ble High Court of Calcutta pending adjudication of assessees entitlement to receive the same cannot be said to be revenue receipt taxable in the accounting period under consideration

The reference relates to the assessment year 1982-83.

We have heard Sri A.N. Mahajan, learned standing counsel for the revenue. Nobody has appeared on behalf of the respondent-assessee.

An identical question came up for consideration before this Court in CIT v. Dhampur Sugar Mills Ltd. (IT Reference No. 18 of 1983), decided on 25-8-2004 wherein this Court has held that the amount of difference in prices of levy sugar realised by the assessee pursuant to the interim order passed by the High Court did not form part of the trading receipt.

Respectfully following the aforesaid decision, we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.