Income-tax Appeal No.707 of 2010 -1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.707 of 2010 Date of decision: 17.12.2010 The Commissioner of Income-Tax, Karnal ...Appellant Versus Karnal Cooperative Sugar Mills Ltd. ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Yogesh Putney, Advocate for the appellant. **** ADARSH KUMAR GOEL, J ( Oral) . 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 9.10.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench (D), Delhi in ITA No.1866/Del/2002, for the assessment year 1999- 2000, proposing following substantial questions of law:- “a). Whether on the facts and circumstances of the case, the ITAT was justified in holding that manufacturing of sugar from sugarcane is marketing of agricultural produce grown by members of assessee society and the assessee society is eligible for deduction u/s 80P(2) (a) (iii) of the I.T.Act, 1961 despite the fact that (a) manufacture of sugar from sugarcane resulted in the emergence of totally new substance, which is a commercial Income-tax Appeal No.707 of 2010 -2- **** produce and (b) in the manufacturing process, in fact, the assessee incurred all the expenditure on its own and marketed the sugar in its own name and as such it cannot be said that the sugar in its own name and as such it cannot be said that the sugar which was sold by the assessee belonged to its members? b) Whether on the facts and in the circumstances of the case, the ld. ITAT was right in departing from its own decision in this case i.e. identical case of the Karnal Cooperative Sugar Mills ltd. (253 ITR 659) solely on the basis of the fact that the earlier judgment had wrongly based itself on the criteria contained in 80P(2)(a)(v) i.e. processing agriculture produce with the aid of power, despite the fact that reference to this provision was merely an obiter dicta in the earlier judgment and not part of the main criteria on which the judgment had been given in favour of the revenue?”. 2. It is not disputed that issues raised in the appeal are covered by judgment of Full Bench of this Court in Budhewal Co-op. Sugar Mills Limited Vs. Commissioner of Income-Tax [2009] 315 ITR 351 which has been followed by the Tribunal. 3. Accordingly, this appeal is disposed of in same terms. (Adarsh Kumar Goel) Judge December 17,2010 (Ajay Kumar Mittal) Pka Judge