2022 (8) TMI 1567 - AT - Income Tax

Sale of sugar on concessional rate to members - HELD THAT - Similar issue has come up for consideration before co-ordinate Bench of Pune Tribunal in the case of Shree Adinath SSK Ltd. Vs. ACIT 2022 (5) TMI 1561 - ITAT PUNE wherein held excess sugar cane price paid to Members and Non-members and the issue of sale of sugar at concessional rate to Members are remanded to the file of the ld. A.O for fresh adjudication for the purpose of giving effect to the directions of the Hon ble Apex Court KRISHNA SAHAKARI SAKHAR KARKHANA LTD. 2012 (11) TMI 669 - SUPREME COURT in its proper perspective. . Respectfully following the decision cited hereinabove the issue with respect to sale of sugar at concessional rate to Members is remanded back to the file of the ld. A.O for fresh adjudication. Appeal of assessee is allowed for statistical purposes.

Summary

The appeal before the Appellate Tribunal emanated from the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2015-16. The core issue for adjudication was the sale of sugar at a concessional rate. The Tribunal noted that this issue had been considered in various cases following the judgment of the Supreme Court in CIT Vs. Tasgaon Taluka S.S.K. Ltd. The Tribunal referred to a similar issue considered by a co-ordinate Bench in the case of Shree Adinath SSK Ltd. Vs. ACIT, where it was observed that the sale of sugar at a concessional rate to members was a key point of contention.The Tribunal highlighted that the issue of taxability of sale of sugar at concessional rates to members had been addressed by the Supreme Court in the case of Krishna SSK Ltd. The Court had given specific directions to the Income Tax Authorities regarding the treatment of such concessional sugar prices in the total income of the assessee. However, the Tribunal found that the lower authorities had not adequately complied with the directions of the Supreme Court in their orders.The Tribunal noted that different CIT(A)s had taken varying approaches in their decisions on similar cases. Some CIT(A)s had not addressed the crucial issue of whether the difference between market price and concessional price of sugar should be added to the total income of the assessee society. Others had considered factors such as trade practices, government policies, and the quantity of sugar sold on a monthly basis.In light of the above, the Tribunal concluded that the appeals needed to be remanded to the Assessing Officer for fresh adjudication to ensure compliance with the directions of the Supreme Court. The Tribunal emphasized the importance of recording clear findings and reasons for decision on the taxability of concessional sugar prices. It directed the Assessing Officer to grant a reasonable opportunity of hearing to the assessees and adjudicate the issue in accordance with the law.Ultimately, the Tribunal allowed the appeal of the assessee for statistical purposes and remanded the issue of sale of sugar at a concessional rate back to the Assessing Officer for fresh adjudication. The Assessing Officer was instructed to comply with the principles of natural justice and decide the matter in line with the directions of the Supreme Court. The Tribunal pronounced its order on August 8, 2022.