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TMI Blog2019 (10) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... it needs to be taxed as income of the assessee. This is so because, first of all the termination of the lease agreement should take place and it takes place since certain important duties which were casted upon the lessee company has not been performed by them. That for non-performance, it is quite possible that some loss or damages may arise to the lessor assessee for which the relevant clause emanates the lessor company to forfeit the advance money received from the lessee company to cover up such loss or damage as the case may be. That further, on reading totality of facts along with the indemnity Clause, the advance amount paid for lease cannot be treated as income of the assessee in the given facts and circumstances. - 57/PUN/2018, 58/PUN/2018, 59/PUN/2018, 60/PUN/2018, 61/PUN/2018, 1570/PUN/2018 - - - Dated:- 30-9-2019 - Shri R.S. Syal, VP And Shri Partha Sarathi Chaudhury, JM For the Assessee : Shri Chythanya K.K For the Revenue : Shri Abhijit Haldar. ORDER PER PARTHA SARATHI CHAUDHURY, JM : These bunch of six appeals preferred by the assessee for the various assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch after considering the judgment of Hon ble Supreme Court of India in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. reported as 103 taxmann.com 57 has decided this issue as under : 5. 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 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 pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of the component of profit which will be a part of the final determination of SAP and/or the 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 non-members are concerned, the same can be dealt with and/or considered applying Section 40A (2) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the appeals, the assessees have raised an alternate ground for allowing deduction u/s.80P in respect of the addition. 8. The ld. ARs, in some of the cases, which were represented by them, were fair enough not to press such ground as it is only an alternate ground and having become infructuous in view of the restoration of the matter to the AO. No argument was advanced in support of such ground in other cases, even where the ld. ARs participated in proceedings before the Tribunal. Therefore, the said alternate ground in all such cases is dismissed. 7. Thus, in view of the statement made by both the sides that the facts in the present set of appeals are identical, the issue relating to excess sugarcane price paid by the assessee is restored to the file of Assessing Officer with similar directions as above in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT (supra). The Assessing Officer shall decide the issue after affording reasonable opportunity of hearing to the respective assessee, in accordance with law. Sale of Sugar at Concessional rates to the Members/Shareholders 8. The Ld. DR submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 assessment order to the AO and other to the CIT(A), which is not appropriate. We order accordingly. 10. Both the sides have stated at the Bar that the issue raised in present set of appeals are identical to the one already decided by the Co-ordinate Bench. Thus, in view of the above order by Co-ordinate Bench this issue is restored back t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer as well as before the Ld. CIT(Appeals) and vehemently argued that there has been wrong interpretation by the Ld. CIT(Appeals) so far as lease agreement is concerned. He invited our attention to the copy of lease deed placed at Pages 417 to 462 of the paper book between the assessee, lessor and lessee, Shree Renuka Sugars dated 30.09.2011. That there in Clause 12.1, Article-XII speaks of termination and consequences of termination and vacation of demised sugar unit. It provides the situation in which the Lessor-society shall be entitled to terminate the lease agreement and there is duty casted upon the lessee company. If these duties are not performed by the lessee, the assessee may terminate the lease agreement. That therefore, it is not only the question of receiving money from the lessee but equal responsibility is there on the lessee to perform certain duties and if the same are not performed by them that would amount to termination of the lease agreement. 14. That therefore, it is not a blanket case of receiving money by lessor from the lessee and deriving income in the grab of lease deed. That further, Para 12.2 of the lease agreement simi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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