2009 (12) TMI 10

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....il appeals, the assessee(s) is engaged in ginning and pressing of cotton for State Cooperative Cotton Market Federation [`Federation(s)', for short]. The assessee(s) receives income by way of ginning and pressing charges. The assessee(s) and the Federation(s) have entered into an Agreement which governs conditions of processing, ginning and pressing of cotton, fixation of processing rates and godo....

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.... basis that the rate is a composite charge, the Department, during the relevant years, has been attributing an ad-hoc amount applying the rule of proportionality towards rental income. Each of these assessees are claiming fifty per cent of the total ginning and pressing charges receivable by the assessee(s) as rental income. In that connection, the assessee(s) is relying upon the judgement of the ....

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.... In our view, Department has failed to take into account number of factors, namely, the provisions of Cotton Ginning and Pressing Factories Act, 1925, the expenses incurred towards payment of labour charges, etc. The Department ought to have also examined the proportion of income accruing to the assessee(s) from storage facility vis-a- vis the income accruing to the assessee(s) from ginning and pr....