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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 ..... SUDHIR M MEHTA, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) The petitioner, a sugar co-operative society has challenged a notice dated 20.3.2015 seeking to re-open the petitioner's assessment for the assessment year 2010-2011. The Assessing Officer has supplied reasons recorded by him for re-opening the assessment. Such reasons read as under: "The Assessee is a co-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & L account, it is observed that the assessee has shown purchase of sugarcane to the tune of Rs. 61,8,5,91,891/-. Therefore, the assessee has paid excess purchase price of Rs. 29,53,23,403/- than the SMP/FRP fixed by the Government.(Rs. 61,85,91,891/- less Rs. 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ane price to be given). It seems from the balance-sheet that no such provision is made. Section 37(1) of the I.T. Act lays down the expenditure that is deductible-Any expenditure (not being expenditure of the nature described in section 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit/application of income and cannot be allowed as "business 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 3. The said judgment of this Court in the case of Shri Chalthan Vibhag Khand Udyog Mandli Ltd. (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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