If the Government departments maintain a panel of independent experts to whom reference can be made when one hits a grey area, it would be so much conducive to speedy resolution of disputes and spare the routine remitting back of matter by the higher courts.

Observations to the above effect were made by the Supreme Court while disposing of a batch of cases including Morinda Co-operative Sugar Mills Ltd vs. Commissioner of Income-Tax and Joint CIT Karnal Co-operative Sugar Mills Ltd.

All these sugar cooperatives were claiming exemption from income tax under section 80P of the Income-Tax Act 1961 but the Revenue authorities contested their claims on the ground that the exemption was available only when the product marketed was agricultural.

It contended that when sugarcane was converted into sugar, it lost the character of agricultural product.

The cooperatives argued that there was no manufacturing involved when sugarcane was converted into sugar through the photosynthesis process and resultantly the agricultural input retained its character even while being marketed as sugar.

The apex court remanding the matters back to High Courts which in their turns would perhaps remand the matters back to the Tribunals, the ultimate fact-finding bodies, observed that precious time could have been saved had the Central Board of Direct Taxes had a panel of independent experts to pronounce on the vexed issue whether sugar resulted from manufacturing or not.

(The author is a New Delhi-based chartered accountant)

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