- (1.) This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short ''the Act'') against the order dated 22.12.2009 passed by the Income Tax Appellate Tribunal, Chandigarh Bench ''A'' (hereinafter referred to as ''the Tribunal'') in ITA No. 1184/Chd/1993, relating to the assessment year 1995-96, claiming the following substantial questions of law:- (i) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is right in allowing the deduction u/s 80P(2)(a)(iii) to the assessee as sugar and molasses are products of a complex manufacturing process which involves usage of Plant and Machinery? (ii) Whether on the facts and circumstances of the case and in law the Hon'ble ITAT is right in allowing the deduction u/s 80P(2)(a)(iii) to the assessee as sugar and molasses are not the marketable agricultural produces grown by the members?
(2.) Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee is a Cooperative Society engaged in marketing of agricultural produce of its members and it filed its return on 30.10.1996 showing nil income after claiming deduction under Section 80P(2)(a)(iii) of the Act. The Assessing Officer vide order dated 24.2.1997 rejected the claim of the assessee on the ground that the sugar and molasses were by-products of a complex manufacturing process which involved usage of plant and machinery. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)in short ''the CIT(A)''. who vide order dated 26.9.1997 deleted the addition holding that in the case of sugarcane the only method of marketing available to a cooperative society was to produce sugar and sell the same. Against the order of the CIT(A), the department filed an appeal before the Tribunal. The Tribunal vide order dated 13.6.2003 set aside the order of the CIT(A) and directed the Assessing Officer not to allow deduction to the assessee under Section 80P(2)(a)(iii) of the Act by relying upon the decision of the jurisdictional High Court in the case of Karnal Cooperative Sugar Mills Ltd. v. CIT,2002 253 ITR 659 and in the case of National Agriculture Cooperative Marketing Federation of India Ltd. v. Union of India, 2003 260 ITR 548 Against the order of the Tribunal, the assessee filed an appeal before this Court (ITA No. 27 of 2004) which vide order dated 12.10.2009 set aside the order of the Tribunal and remanded the matter to the Tribunal for fresh orders in view of the decision of the High Court in Budhewal Cooperative Sugar Mills Ltd. v. CIT,2009 315 ITR 351. The Tribunal vide order dated 22.12.2009 dismissed the appeal filed by the revenue against the order of the CIT(A) dated 26.9.1997 by relying on the decision of this Court in Budhewal Cooperative Sugar Mills Ltd. 's case . Hence, the present appeal by the revenue.
(3.) We have heard learned counsel for the appellant.;