Commissioner of Income Tax vs Raza Buland Sugar Co.

The Income Tax Appellate Tribunal, New Delhi 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 was right in holding that the extra amount realised by the assessee-as sale price of sugar, over and above the levy price fixed by the Government, was not a taxable receipt in the hands of the assessee for assessment years 1974-75, 1975-76 and 1976-77?"

The present reference relates to the assessment years 1974-75, 1975-76 and 1976-77.

We have heard Sri Shambhoo Chopra, learned standing counsel appearing for the revenue and Sri Shakeel Ahmad, learned counsel appearing for the respondent-assessee.

It maybe mentioned here that the Tribunal while holding that the excess amount realised by the respondent-assessee did not form part of the sale price had relied upon its earlier decision in the case of CIT v. Dhampur Sugar Mills Ltd. (IT Reference No. 18 of 1983, dated 25-8-2004). The matter came up before this court in Dhampur Sugar Mills Ltd.s case (supra), has upheld the order of the Tribunal holding that the excess amount realised by the sugar mill over and above the price fixed by the government did not form part of the trading receipt and accordingly answered the question referred in favour of the assessee and against the revenue.

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