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of <h1>High Court dismisses appeal under Section 260A, ruling in favor of assessee on tax issues.</h1> <h3>Commissioner Of Income Tax-Ii, Kanpur Versus M/s Moti Lal Padampat Udyog Ltd., Kanpur</h3> Commissioner Of Income Tax-Ii, Kanpur Versus M/s Moti Lal Padampat Udyog Ltd., Kanpur - tmi Issues:1. Disallowance of deduction on excess realisation of levy sugar price as a contingent liability.2. Addition of extra sales realization on additional free sale quota under 'Incentive Scheme 1988' as part of trading receipt.3. Applicability of decision in the case of M/s. K.C.P. Limited vs. Commissioner of Income Tax on extra sales realization.Issue 1 - Disallowance of Deduction on Excess Realisation of Levy Sugar Price:The appeal under Section 260A of the Income Tax Act raised the question of disallowing the deduction in respect of excess realisation of levy sugar price, which was a contingent liability not due for payment. The Income Tax Appellate Tribunal (ITAT) did not uphold the Assessing Officer's order in disallowing the deduction. The Court referred to previous decisions, including Commissioner of Income Tax v. Dhampur Sugar Mills Ltd. and held that the issue was covered by precedent. The Court answered this question against the revenue and in favor of the assessee, resulting in the dismissal of the appeal.Issue 2 - Addition of Extra Sales Realization Under 'Incentive Scheme 1988':The second issue involved the addition of extra sales realization on additional free sale quota under the 'Incentive Scheme 1988.' The Assessing Officer's action in making this addition was not upheld by the ITAT. The revenue contended that the excess amount realized formed part of the trading receipt. However, the Court cited a case precedent, Commissioner of Income Tax and another v. Kisan Sahkari Chini Mills Ltd., where a similar issue was decided against the revenue. Following the precedent, the Court answered this question against the revenue and in favor of the assessee, leading to the dismissal of the appeal.Issue 3 - Applicability of Decision in M/s. K.C.P. Limited vs. Commissioner of Income Tax Case:The final issue addressed whether the decision in the case of M/s. K.C.P. Limited vs. Commissioner of Income Tax on extra sales realization was applicable in the present case. The ITAT did not uphold the Assessing Officer's action in making the addition on account of extra sales realization. The Court considered the decision in the mentioned case and found it to be against the revenue. Consequently, the Court answered this question against the revenue and in favor of the assessee. As a result, the appeal was dismissed on all three issues.This judgment, delivered on 5.1.2010, highlighted the application of precedent in resolving the tax-related disputes raised in the appeal, ultimately resulting in a decision in favor of the assessee on all three issues presented before the High Court of Allahabad.
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