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2019 (3) TMI 1637 - AT - Income TaxBusiness expenditure - Excess Cane Price Paid to Sugarcane Suppliers o ver and above the Statutory Minimum Price (SMP) fixed by State Government for purchase of cane. - HELD THAT - In view of the statement made by both the sides that the facts in the present set of appeals are identical the issue relating to excess sugarcane price paid by the assessee is restored to the file of Assessing Officer with similar directions as above in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT 2019 (3) TMI 906 - ITAT PUNE . AO shall decide the issue after affording reasonable opportunity of hearing to the respective assessees in accordance with law. Sale of Sugar at Concessional rates to the Members/Shareholders - HELD THAT - Issue of sale of sugar at concessional rates has also been considered by the Co-ordinate Bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT 2019 (3) TMI 906 - ITAT PUNE remitted the issue of payment of excessive price to the file of AO and as such the instant issue cannot be sent to ld. CIT(A) as it would amount to simultaneously sending one part of the same assessment order to the AO and other to the CIT(A) which is not appropriate. Disallowance of contribution to Area Development Fund - HELD THAT - It is noticed that in the appeals under consideration the ld. CITs(A) have not considered the impact of the judgment of the Hon ble Supreme Court in Siddheshwar Sahakari Sakhar Karkhana Limited 2004 (9) TMI 6 - SUPREME COURT and decided the issue without taking note of the factors directed to be considered in the aforenoted case. In view of the above decision of Hon ble Supreme Court we set-aside such impugned orders and remit the matter to the file of the respective AOs for deciding the issue afresh in conformity with the guidelines laid down by the Hon ble Apex Court in the above judgment. Provision for Vasantdada Sugar Institute (VSI) Contribution to be allowed in favour of the assessee. Disallowance of Employees contribution towards Provident Fund - HELD THAT - The assessees eligibility to claim deduction of delayed deposit of employees share in Provident Fund scheme but before due date of filing return of income is no more res integra. The Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. Ghatge Patil Transports Ltd. 2014 (10) TMI 402 - BOMBAY HIGH COURT after considering the judgment in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT held that deduction to be allowed only on actual payments before the due date of filing return of income and the amended provisions of section 43B applies to both employee s and employer s contribution. In the present set of appeals it is not disputed by the Revenue that the contribution was made before the due date of filing return of income. Thus in view of well settled law and the facts of the case this issue is decided in favour of the assessees. Disallowance of Contribution towards Chief Minister Fund - HELD THAT - We find that this issue has been considered by Co-ordinate Bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT . 2019 (3) TMI 906 - ITAT PUNE we cannot uphold the disallowance of the entire amount claimed as deduction by the assessee in its Profit and loss account. Approving the additions made we remit the matter to the file of the AO for granting the deduction u/s.80G(iiihf) as per law after allowing a reasonable opportunity of hearing to the assessee Disallowance of Interest on Loans u/s. 43B - HELD THAT - The said resolution is in connection with mid term loan granted to the sugar factories at interest rate of 2% per annum. The loan has been provided by the Government and has been disbursed through banks/financial institutions. This fact has not been disputed by the Revenue. It is not a case where the loans have been granted to the sugar factories by the banks/financial institutions. Thus in the peculiar facts of the case we concur with the findings of Commissioner of Income Tax (Appeals) in holding that the provisions of section 43B are not attracted. We confirm the findings of Commissioner of Income Tax (Appeals) on this issue. Consequently the issue is decided in favour of the assessees. Harvesting and Transportation Expenditure - HELD THAT - In view of CBDT Circular No. 6/2007 dated 11-10-2007 the harvesting and transportation expenditure are allowable. Consequently the issue is decided in favour of the assessees.
Issues Involved:
1. Excess cane price paid by the assessees to sugarcane suppliers. 2. Addition on account of sale of sugar at concessional rate to the members/shareholders. 3. Disallowance of contribution towards Area Development Fund. 4. Provision for Vasantdada Sugar Institute (VSI) Contribution. 5. Disallowance of Employees Contribution towards PF. 6. Addition account of contribution towards Chief Minister relief fund. 7. Disallowance of interest u/s. 43B. 8. Disallowance of Cane Harvesting and Transportation Expenditure. Issue-wise Detailed Analysis: 1. Excess Cane Price Paid to Sugarcane Suppliers: The Tribunal referred to the Supreme Court judgment in CIT Vs. Tasgaon Taluka S.S.K. Ltd. (2019) 103 taxmann.com 57, which dealt with the issue of excessive price paid for sugarcane. The Supreme Court directed that the difference between the Statutory Minimum Price (SMP) and the State Advised Price (SAP) should be analyzed to determine the component of profit distribution. The Tribunal remitted the matter to the Assessing Officers (AOs) to determine the deductible expenditure and the profit component, following the guidelines provided by the Supreme Court. 2. Sale of Sugar at Concessional Rates to Members/Shareholders: This issue was addressed by the Supreme Court in CIT Vs. Krishna Sahakari Sakhar Karkhana Limited (2012) 27 taxmann.com 162. The Tribunal directed the AOs to re-examine whether the difference between the market price and the concessional rate represents an appropriation of profit, considering the guidelines laid down by the Supreme Court. The matter was remitted to the AOs for fresh adjudication. 3. Disallowance of Contribution to Area Development Fund: The Tribunal referred to the Supreme Court's judgment in Siddheshwar Sahakari Sakhar Karkhana Limited Vs. CIT (2004) 270 ITR 1 (SC), which remitted the matter for fresh determination. The Tribunal directed the AOs to decide the issue afresh, considering the guidelines provided by the Supreme Court. 4. Provision for Vasantdada Sugar Institute (VSI) Contribution: The Tribunal followed its earlier decision in the case of Bhima S.S.K. Ltd. (ITA No. 1414/PUN/2000), which was in favor of the assessees. No contrary material was placed on record. Thus, the issue was decided in favor of the assessees. 5. Disallowance of Employees Contribution towards PF: The Tribunal noted that the issue was settled by the Supreme Court in Commissioner of Income Tax Vs. Alom Extrusions Ltd. (319 ITR 306). The Bombay High Court in Commissioner of Income Tax Vs. Ghatge Patil Transports Ltd. (368 ITR 749) held that contributions made before the due date of filing the return are allowable. Since the contributions were made before the due date, the issue was decided in favor of the assessees. 6. Disallowance of Contribution towards Chief Minister Fund: The Tribunal referred to its earlier decision in Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT, which directed the AOs to grant deduction under section 80G(iiihf) for contributions to the Chief Minister Relief Fund. The matter was remitted to the AOs for fresh adjudication. 7. Disallowance of Interest on Loans u/s. 43B: The Tribunal noted that the loans were provided by the Government and disbursed through banks/financial institutions. The provisions of section 43B were not attracted. The Tribunal concurred with the findings of the Commissioner of Income Tax (Appeals) and decided the issue in favor of the assessees. 8. Disallowance of Cane Harvesting and Transportation Expenditure: The Tribunal referred to CBDT Circular No. 6/2007, which stated that such expenses are incurred for commercial expediency and are allowable. Consequently, the issue was decided in favor of the assessees. Conclusion: The appeals were allowed/partly allowed for statistical purposes, with issues remitted to the AOs for fresh adjudication, following the guidelines provided by the Supreme Court and the Tribunal's earlier decisions. The order was pronounced on March 20, 2019.
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