RAVALGAON SUGAR FARM LTD. vs COMMISSIONER OF INCOME TAX

Judgment text excerpt

Neeta Sawant INCOME TAX APPEAL-592-2003-FC IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 592 OF 2003 The Ravalgaon Sugar Farm Ltd. ….Appellant : Versus : Commissioner of Income Tax, City-II, Aayakar Bhavan, Mumbai ….Respondent Mr. S. Sriram with Mr. B. V. Jhaveri & Mr. Dinesh Kukreja, for Assessee- Appellant. Ms. Samiksha R. Kanani, for Revenue-Respondent. CORAM : ALOK ARADHE, CJ. & SANDEEP V. MARNE, J. Judgment Reserved on : 31 July 2025 Judgment Pronounced on : 5 August 2025 JUDGMENT : (Per Sandeep V. Marne, J.) 1) The Assessee has preferred this Appeal under Section 260A of the Income Tax Act, 1961 (the Act) assailing the order dated 24 January 2003 passed by Income Tax Appellate Tribunal, Mumbai Bench (ITAT) in I.T.A. No. 871/Bom/94, by which the Appeal preferred by the Assessee has been dismissed. The Assessee had challenged the order of Commissioner of Income Tax (Appeals) upholding the order of the Assessing Officer deducting the additional ______________________________________________________________________________ Page No.1 of 25 5 August 2025 Neeta Sawant INCOME TAX APPEAL-592-2003-FC cane price of Rs.78,86,857/- from the profits of the Assessee for AY 1990-91 while allowing the benefit under Section 32AB of the Act. 2) The issue involved in the appeal is whether it is permissible for an Assessee to seek benefit of 20% deduction under Section 32AB of the Act on profits as reflected in the Profit & Loss Account finalized under Part II and III of the VI Schedule of the Companies Act, 1956 (Companies Act) or whether they must be determined with reference to the actual profits for the purposes of the Income Tax Act. The issue arises in the peculiar circumstances where the additional sugarcane price is requir