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TMI Blog2016 (6) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 (7) TMI 297 - GUJARAT HIGH COURT ], had quashed the notice for re-opening which was based on identical reasons, it was held that the difference between the price to be paid to cane growers and the purchase price declared by the Government under sugar Sugar Control Order cannot be said to be by way of distribution of profits. It was held that the Assessing Officer had not carried out any inquiry before coming to a contrary conclusion and that he should not have a reasonable belief for forming the opinion that the income chargeable to tax had escaped the assessment. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 3994 of 2016 - - - Dated:- 13-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Government.(Rs. 61,85,91,891/- less ₹ 32,32,68,488/-). On plain perusal of the above figures, it is noticed that the assessee has not followed system of SMP/FRP while payment for sugarcane purchase from its members. What is in fact, followed is the Final Cane Price . The final cane price was determined by the assessee after the completion of financial year and therefore, the entries made in the books of accounts of assessee reflecting expenditure incurred by way of purchases are not real time entries. It is further noticed that the assessee has not made provision at the end of the accounting period (31st March) but the excess payment made after the financial year by passing a Resolution of the Board. Thus in this way, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness expenditure under section 37 of the Act while computing profits and gains of business or profession of the assessee. In view of the above, I have reason to believe that amount of ₹ 29,52,23,403/- incurred by the assessee for purchase of sugarcane over and above the SMP/FRP determined by the central government is escaped assessment within the meaning of section 147 of the I.T.Act, 1961. 2. It is undoubtedly true that the original return was not taken in scrutiny by the Assessing Officer and was merely accepted under section 143(1) of the Income-tax Act, 1961. However, the central question of taxability of income of the sugarcane in the background of reasons recorded had come up before this Court on couple of occasions i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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