Mehsana Dist. Co. Op. Milk Producers'' Union Ltd. vs Commissioner of Income Tax

D.A. Mehta, J.—The Income Tax Appellate Tribunal, Ahmedabad Bench "C" has referred the following two questions u/s 256(1) of the Income Tax Act, 1961, at the instance of the assessee for the assessment year 1988-89:

Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the amount transferred to the reserve fund account as per the provisions of Section 67 of the Gujarat Co-operative Societies Act, 1961, was not a diversion of income at source by overriding title?

Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the transfer to reserve fund cannot be treated as a business expenditure and allowed deduction u/s 28/37 of the Income Tax Act, 1961?

It is an admitted position between the parties that the issue raised by the two questions is concluded by a judgment rendered today between the same parties in Commissioner of Income Tax Vs. Mehsana Dist. Co-Operative Milk Producers'' Union Ltd., . Hence, for the reasons stated in the judgment of even date rendered in I. T. R. No. 65 of 1997, both the questions, at the instance of the assessee, are answered in the affirmative, i.e., in favour of the Revenue and against the assessee. The reference stands disposed of accordingly.

There shall be no order as to costs.