1 Tax Appeal No.42/2009 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD Tax Appeal No.42 OF 2009 The Commissioner of Income Tax-I, ] Aaykar Bhavan, PMT Building B Wing,] Shankar Seth Road, ] Swargate Pune 411 037. ] ... Appellant. Versus Pad. Dr. Vitthalrao Vikhe Patil ] Sahakari Sakhar Karkhana Ltd., ] At Post Pravaranagar, ] Taluka Rahata, ] District Ahmednagar. ] ... Respondent. -------- Shri. Alok Sharma, Counsel for appellant. Shri. N.D. Sonwane, holding for Shri. V.D. Hon, Advocate for respondent. -------- CORAM: NARESH H PATIL & SHRIHARI P. DAVARE, JJ. DATE: 8th DECEMBER, 2010 ORAL JUDGMENT (PER NARESH H PATIL, J): 1) This appeal is heard finally with consent of the learned counsel appearing for the parties. 2 Tax Appeal No.42/2009 2) The Commissioner of Income Tax has challenged the judgment and order passed by the Income Tax Appellate Tribunal, Pune Bench, Pune dated 30th December 2008. The respondent filed appeal against the order of the Deputy Commissioner of Income Tax, Ahmednagar Circle, Ahmednagar, passed under section 143(3) of the Income Tax Act 1961. The Revenue had disallowed Rs.4,08,03,703=00 and Rs.3,26,67,285=00 being excessive sugarcane price paid to farmers as expenditure. In the view of the Revenue the said amount paid by the respondent to the cane growers was by way of diversion of profits. By judgment and order dated 8-7-2008 the Commissioner of Income Tax (Appeals)-I Pune partly allowed the appeal. The Revenue preferred appeal to the Income Tax Appellate Tribunal Pune Bench Pune. By judgment and order dated 30th December 2008 the appeal came to be dismissed. 3) The learned counsel Shri. Alok Sharma appearing for the appellant placed reliance on an order passed by the Apex Court in a batch of appeals connected with Civil Appeal No.617 of 2010 - Dy. Commissioner of 3 Tax Appeal No.42/2009 Income Tax, Nashik v. Shri Satpuda Tapi Parisar SSK Ltd. The issue relating to applicability of Section 40A(2) of the Income Tax Act 1961, as it stood at the relevant time, was considered. The issue in respect as to whether the difference in payment of amount as price of sugarcane constitutes an expense or distribution of profits arose in the said appeals before the Apex Court. By order dated 20th January 2010 all those appeals were remitted back to the concerned Commissioner of Income Tax (Appeals). Both the parties were given liberty to amend their pleadings before the Commissioner of Income Tax (Appeals). The civil appeals filed by the Department were accordingly disposed of. 4) Considering the issue raised in the present appeal by the Department, we find it appropriate to adopt the same course to remit back this appeal to the concerned Commissioner of Income Tax (Appeals). 5) We have heard the submissions of the learned counsel for the appellant and the respondent. 4 Tax Appeal No.42/2009 6) In the light of the reasons adopted by us as above the impugned judgments and orders are quashed and set aside. The matter is remitted back to the concerned Commissioner of Income Tax (Appeals). The parties are at liberty to amend their pleadings before the Commissioner of Income Tax (Appeals). They are at liberty to argue their respective points uninfluenced by any observations made in the impugned judgments. The appeal shall be disposed of finally by the concerned Commissioner Income Tax (Appeals). We do not express any opinion in respect of merits of the contesting claims of the respective parties. 7) The appeal is disposed of with no order as to costs. Sd/- Sd/- (SHRIHARI P. DAVARE, J.) (NARESH H PATIL, J.) rsl