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TMI Blog2020 (5) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... gether. First we shall take up appeal in ITA No. 1178/PUN/2017. 4. The facts of the case as emanating from records are: The assessee is a Co-operative Society engaged in manufacturing of sugar and industrial alcohol. The assessee company is registered under the Maharashtra Co. Op. Society's Act, 1960. It is a co-operative sugar factory situated at Nhavi Marg, Faizpur, Taluka Yawal, Distt.-Jalgaon. 5. Shri Rajesh Gawali, the ld. DR submitted that the issue raised in ground No. 1 relates to the issue of addition of Rs. 4,46,88,714/- on account of excess sugarcane price made by the AO. Relating to ground No. 2, the ld. DR mentioned that the issue relating to H & T expenses allowable u/s. 37 of the Act. The ld. DR submitted that the issue raised in appeal by the assessee is identical to the one already decided by the Tribunal in the case of Majalgaon SSK Ltd. Vs. ACIT in ITA No. 308/PUN/2018 for assessment year 2013-14 decided on 14-03-2019. Further, the Tribunal while deciding batch of appeals has restored this issue to the file of Assessing Officer to decide the issue in light of decision of Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Tasgaon Taluk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice 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 the Government to fix minimum sugarcane price. In addition, the additional sugarcane price is also payable as per clause 5A of the Control Order, 1966. The AO in that case concluded that the difference between the price paid as per clause 3 of the Control Order, 1966 determined by the Central Government and the price determined by the State Government under clause 5A of the Control Order, 1966, was in the nature of `distribution of profits' and hence not deductible as expenditure. He, therefore, made an addition for such sum paid to members as well as non-members. When the matter finally came up before the Hon'ble Apex Court, it noted that clause 5A was inserted in the year 1974 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng/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 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 assessing officer will have to take into account the manner in which the business works, the modalities and manner in which SAP/additional purchase price/final price are decided and to determine what amount would form part of the profit and after undertaking such an exercise whatever is the profit component is to be considered as sharing of profit/distribution of profit and the rest of the amount is to be considered as deductible as expenditure." 6. Both the sides are unanimously agreeable that the extant issue of deduction for payment of excessive price for purchase of sugarcane, raised in most of the appeals under co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le deduction. 7. Shri Prasanna Joshi representing the assessees submitted that in these bunch of appeals there is segment of appeals wherein the ratio laid down by the Hon'ble Apex Court in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. (supra) does not apply. The ld. AR submitted that the Statutory Minimum Price (SMP) regime came to an end on 22-10-2009. Thereafter, the cane price paid to farmers from Financial Year 2009-10 was on the basis of Fair and Remunerative Price (FRP). The ld. AR further explained the purpose of fixing FRP and sought directions that the issue relating to payment to cane growers by the assessee towards purchase of sugarcane post October, 2009 should be made independent of the directions in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. (supra). The ld. AR contended that in the changed scenario, w.e.f. assessment year 2009-10 it would be difficult to give effect to the decision of Hon'ble Apex Court. The ld. AR further pointed that the Coordinate Bench of Tribunal in the case of bunch of appeals lead case being Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. DCIT in ITAT No. 1210/PUN/1997 decided on 01-05-2019 has dealt with this issue. We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board. These expenses are incurred by the Sugar Mills for ensuring an adequate and sustained supply of freshly cut sugarcane that is an essential input for the continuous running of such Mills. These expenses are, therefore; incurred for a commercial expediency and are prima facie wholly and exclusively for the purpose of business. Such expenses are, therefore, allowable in the computation of the income of the Co-operative Sugar Mills." 9. Thus, in view of CBDT Circular (supra) harvesting and transportation expenditure are allowable, the issue in ground No. 2 is allowed. 10. In the result, the appeal of assessee is allowed for statistical purpose. ITA No. 1338/PUN/2017, (A.Y. 2013-14) 11. In the present case facts being identical, the findings given by the Co-ordinate Bench on the above said issue would mutatis mutandis apply in the present case. Ground Nos. 1 and 2 raised in present appeal are corresponding ground Nos. 1 and 2 raised in the appeal in ITA No. 1178/PUN/2017 by the assessee. Accordingly, ground Nos. 1 and 2 are allowed for statistical purpose. 12. Ground Nos. 3 and 4 are general in nature, hence, require no adjudication. 13. In the result, both the appeals by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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