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C.I.T. vs M/S U.P.S.S.C. Ltd. on 7 January, 2010

Allahabad High Court
C.I.T. vs M/S U.P.S.S.C. Ltd. on 7 January, 2010
                                                                   1

Court No. - 37

Case :- INCOME TAX REFERENCE No. - 350 of 1980

Petitioner :- C.I.T.
Respondent :- M/S U.P.S.S.C. Ltd.
Petitioner Counsel :- Govind Krishna
Respondent Counsel :- Ravi Kant

Hon'ble Rajes Kumar,J.

Hon’ble Subhash Chandra Nigam,J.

Shri Shambhu Chopra is present on behalf of the Revenue.
The Tribunal has referred the following questions of law for
opinion of this Court.

1. Whether having regard to the provisions of U.P.
State Sugar (Acquisition) Act, 1971 and on a proper
interpretation of the word ‘vest’ it was rightly held that
the stocks in question of sugar belonged to the
Government and not to the assessee Corporation?

2. Whether the excess realization from the sale of
sugar taken over by the assessee could be held to
belong to the State Government on the basis of the
agreement dated 15.9.1972 between the Assessee
Corporation and the U.P. Government, Profit and
Loss account and the balance sheet of the assessee?

3. Whether the Tribunal was legally correct in deleting
the addition of Rs. 11,25,635/- on account of excess
realized on the sale of stock of sugar taken over by
the assessee.”

The reference came up for consideration before a Division
Bench consisting of Hon’ble Mr. Justice S.L. Saraf and Hon’ble Mr.
Justice Ikram-Ul-Bari,JJ. Both the Hon’ble Judges have difference of
opinion after hearing the matter and delivered the separate
judgements.

Hon’ble Mr. Justice S.L. Saraf, J had answered all the three
questions in affirmative, in favour of the assessee and against the
Revenue while Hon’ble Mr. Justice Ikram-Ul-Bari, J answered all the
three questions in negative, in favour of the Revenue and against the
assessee.

2

In view of the aforesaid facts, the matter was referred to third
Judge. Hon’ble Mr. Justice S. Rafat Alam, J was nominated by
Hon’ble the Chief Justice to decide the matter.

Hon’ble Mr. Justice S. Rafat Alam, J has decided the matter
vide order dated 05.12.2008. He agreed with view, expressed by
Hon’ble Mr. Justice Ikram-Ul-Bari, J and accordingly answered all the
three questions in negative, in favour of the Revenue and against the
assessee.

In view of the decision of majority view, all the three questions
are being answered in negative, in favour of the Revenue and against
the assessee.

Date: 7.1.2010
MK/

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