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TMI Blog2019 (6) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 1.66 crore and odd on account of excess cane price paid, which came to be deleted in the first appeal. 4. We have heard both the sides and gone through the relevant material on record. It is an agreed position between the rival parties that the issue of payment of excessive price on purchase of sugarcane by the assesses is no more res integra in view of the recent judgment of Hon'ble Supreme Court in CIT Vs. Tasgaon Taluka S.S.K. Ltd. (2019) 103 taxmann.com 57 (SC). The Hon'ble Apex Court, vide its judgment dated 05-03- 2019, has elaborately dealt with this issue. It recorded the factual matrix that the assessee in that case purchased and crushed sugarcane and paid price for the purchase during crushing seasons 1996-97 and 1997-98, firstly, at the time of purchase of sugarcane and then, later, as per the Mantri Committee advice. It further noted that the production of sugar is covered by the Essential Commodities Act, 1955 and the Government issued Sugar Cane (Control) Order, 1966, which deals with all aspects of production of sugarcane and sales thereof including the price to be paid to the cane growers. Clause 3 of the Sugar Cane (Control) Order, 1966 authorizes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final price/additional purchase price fixed under Clause 5A would certainly be and/or said to be an appropriation of profit. However, at the same time, the entire/whole amount of difference between the SMP and the SAP per se cannot be said to be an appropriation of profit. As observed hereinabove, only that part/component of profit, while determining the final price worked out/SAP/additional purchase price would be and/or can be said to be an appropriation of profit and for that an exercise is to be done by 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 non-members, qua the members, still the question would remain with respect to the distribution of profit/sharing of the profit. So far as the nonmembers 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO on account of understatement of sale. 7. The facts apropos this ground are that the assessee made sale of certain quantities of sugar to M/s. Jai Jagdish Sugar Export/Import, Dhule (JJSD) under quota at the rate of Rs. 1,080/- per bag. The sugar was delivered by the assessee to JJSD, a merchant, against the release order dated 06-11-2001 from the Director, Krishi Bhawan, New Delhi for export purposes. The AO observed that JJSD failed to produce any proof of having made such exports. The sugar purchased from the assessee meant for export at lower price, was, in fact, sold by JJSD in the local market without the Department's permission. The AO called upon the assessee to explain as to why the difference between the market price and the quota price of such sugar should not be taxed in its hands as understatement of sales. The assessee replied that when it demanded proof of export of sugar from JJSD, they could not produce the same and they deposited the excise duty of Rs. 78,34,195/- from 21-03-2002 to 13-06-2002 with the assessee along with interest of Rs. 8,07,544/- on late payment of excise duty, which was duly deposited by it. The assessee submitted that no extra income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an additional ground before the ld. CIT(A) that it incurred liability for salary arrears amounting to Rs. 2,72,51,072/- as per the registered agreement dated 23-11-2011 which was omitted to be debited to the Profit and loss account or claimed as deduction. The assessee claimed that deduction should be allowed for such an amount. The ld. CIT(A) noted in para no.8.2 of the impugned order that: "There is no mention about salary arrears by the AO in the assessment order. However, the appellant is entitled for expenditure claimed on salary and wages. The AO is directed to verify the same and allow relief". The Revenue is aggrieved by it. 12. Having heard both the sides and gone through the relevant material on record, it is observed that the ld. CIT(A) has not granted any relief in respect of the expenditure of Rs. 2.72 crore. He simply directed the AO to verify the assessee's claim and then allow relief. In other words, if on verification, the AO finds that the relief is not due, he will deny the same and vice versa. The mere fact of restoring the matter to the file of AO, in our considered opinion, does not constitute any cause of grievance to the Revenue in asmuch as the ball ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider on what basis the quantity of the final product, i.e. sugar, is being fixed 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 Limited (supra). Restoration to the AO is necessitated because, following the judgment of the Hon'ble Apex Court in the case of Tasgaon Taluka S.S.K. Ltd. (supra), we have 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 assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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