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TMI Blog2019 (4) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price paid both to the members and non-members at Rs. 5,29,14,209.50 and made addition for the said sum. The ld. CIT(A) deleted the addition on this point. 3. Facts in all other cases qua this issue, in so far as the assessment proceedings are concerned, are mutatis mutandis similar. It is seen that in some cases, the addition got deleted by the ld. CIT(A), whilst in others the addition got sustained. This led to filing of the appeals both by the assessee as well as the Revenue before the Tribunal. 4. We have heard both the sides and gone through the relevant material on record. There is consensus ad idem between the rival parties that the issue of payment of excessive price on purchase of sugarcane by the assesses is no more res integra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inserted in the year 1974 on the basis of the recommendations made by the Bhargava Commission, which recommended payment of additional price at the end of the season on 50:50 profit sharing basis between the growers and factories, to be worked out in accordance with the Second Schedule to the Control Order, 1966. Their Lordships noted that at the time when additional purchase price is determined/fixed under clause 5A, the accounts are settled and the particulars are provided by the concerned Co-operative Society as to what will be the expenditure and what will be the profit etc. Considering the fact that Statutory Minimum Price (SMP), determined under clause 3 of the Control Order, 1966, which is paid at the beginning of the season, is ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessing officer by calling upon the assessee to produce the statement of accounts, balance sheet and the material supplied to the State Government for the purpose of deciding/fixing the final price/additional purchase price/SAP under Clause 5A of the Control Order, 1966. Merely because the higher price is paid to both, members and nonmembers, qua the members, still the question would remain with respect to the distribution of profit/sharing of the profit. So far as the non-members are concerned, the same can be dealt with and/or considered applying Section 40A (2) of the Act, i.e., the assessing officer on the material on record has to determine whether the amount paid is excessive or unreasonable or not........ 9.5 Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. 6. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2) of the Act, as has been held by the Hon'ble Supreme Court supra. Needless to say, the assessee will be allowed a reasonable opportunity of hearing by the AO in such fresh determination of the issue. II. ADDITION FOR SUGAR GIVEN TO MEMBERS AT CONCESSIONAL RATES - [Appeals in which Krishn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for sale to farmers/cane growers/Members each year on month-to-month basis, apart from others from Diwali?" The issue under consideration can be decided by an appropriate lower authority only on the touchstone of the relevant factors noted in the above judgment. In our considered opinion, it would be just and fair if the impugned orders on this score are set aside and the matter is restored to the file of AOs, instead of to the CITs(A), for fresh consideration as to whether the difference between the average price of sugar sold in the market and that sold to members at concessional rate is appropriation of profit or not, in the light of the directions given by the Hon'ble Supreme Court in the case of Krishna Sahakari Sakhar Karkhana Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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