INCOME TAX OFFICER v. NAWABGANJ SUGAR MILLS COMPANY LTD
[Citation -1984-LL-0924-3]

Citation 1984-LL-0924-3
Appellant Name INCOME TAX OFFICER
Respondent Name NAWABGANJ SUGAR MILLS COMPANY LTD.
Court ITAT
Relevant Act Income-tax
Date of Order 24/09/1984
Assessment Year 1977-78
Judgment View Judgment
Keyword Tags statutory liability • diversion of income
Bot Summary: Revenue is aggrieved against the order of CIT(A) holding that the statutory liability under s. 18A of U.P. Sheera Niyantran Adhiniyam, 1964 regarding molasses storage fund be allowed. The assessee is Public Limited Company manufacturing sugar. In the relevant accounting year ended on 31st Oct., 1976 the assessee had made provision of Rs. 45,129 for contribution to molasses storage fund which the ITO had disallowed vide para 16.3 CIT(A) vide para 5 held that under the aforesaid Act the assessee had statutory liability to make contribution on certain percentages of its sales proceeds to molasses storage fund and the said amount was to be kept in separate account and its utilisation was within the control of the Controller appointed by the Excise Authorities under the said Act and the assessee had no control or power to utilise or spend these funds and, therefore there was diversion of income at source. Similar view had been taken by ITAT. 'C' Bench, Delhi by order dt. CIT(A) had restored the matter to the ITO to examine the quantum of statutory liability under the said Act. Respectfully following the aforesaid decision of ITAT, 'C' Bench in Basti Sugar Mills Co. Ltd, we uphold the order of CIT(A) and dismiss the departmental appeal.


Revenue is aggrieved against order of CIT(A) holding that statutory liability under s. 18A of U.P. Sheera Niyantran Adhiniyam, 1964 regarding molasses storage fund be allowed. assessee is Public Limited Company manufacturing sugar. In relevant accounting year ended on 31st Oct., 1976 assessee had made provision of Rs. 45,129 for contribution to molasses storage fund which ITO had disallowed vide para 16.3 CIT(A), however, vide para 5 held that under aforesaid Act assessee had statutory liability to make contribution on certain percentages of its sales proceeds to molasses storage fund and said amount was to be kept in separate account and its utilisation was within control of Controller appointed by Excise Authorities under said Act and assessee had no control or power to utilise or spend these funds and, therefore there was diversion of income at source. Similar view had been taken by ITAT. 'C' Bench, Delhi by order dt. 5th Aug., 1983 in I.T.A. No. 1938 (Del)/1982 in ITO vs. M/s R. Basti Sugar Mills Co. Ltd for asst. yr. 1975-76. CIT(A) had, however, restored matter to ITO to examine quantum of statutory liability under said Act. Respectfully following aforesaid decision of ITAT, 'C' Bench in Basti Sugar Mills Co. Ltd, we uphold order of CIT(A) and dismiss departmental appeal. *** INCOME TAX OFFICER v. NAWABGANJ SUGAR MILLS COMPANY LTD.
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