BRIHAN MAHARASHTRA SUGAR SYNDICATE LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under S. 66(2) of the INCOME TAX ACT, 1922, for the decision of the following question :

(2.) THE assessee, Brihan Maharashtra Sugar Syndicate Ltd., Poona, which carries on business in the manufacture and sale of sugar, owns a sugarcane farm, the produce of which is utilised for the production of sugar. If the produce is inadequate to feed its factory which has a capacity of 300 tons per day, the assessee would be required to supplement its produce by outside purchases.

(3.) ,61,337. 4. By the first assessment order dated the 28th of February, 1947, the ITO accepted the assessee's books and statements, particularly in regard to the price of the sugar -cane at Rs. 29 -8 -0 per ton. This rate was accepted on the basis of the statement made by Mr. G. D. Apte, a representative of the assessee, that a small quantity of sugar -cane was purchased by the assessee from other growers at Rs. 29 -8 -0 per ton. On this basis, the ITO arrived at a business loss of Rs. 2,70,233. This amount of loss and the depreciation of Rs. 78,521 were carried forward as there was no other income against which the same could be set off.