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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 ..... 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 - Appeal of assessee is allowed for statistical purpose. - ITA No.1178/PUN/2017, ITA No.1338/PUN/2017 - - - Dated:- 5-3-2020 - Shri D. Karunakara Rao, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : None For the Revenue : Shri Rajesh Gawali ORDER PER S.S. VISWANETHRA RAVI, JM : These cross appeals by the assessee and the Revenue are directed against the order of the Commissioner of Income Tax (Appeals)-2, Nashik dated 29-03-2017 for the assessment year 2013-14. 2. None has appeared on behalf of the assessee. The several notices of appeal were sent to the assessee through RPAD on the address mentioned in Form No. 36. Despite service of notices, none appeared to represent the assessee. The assessee has filed written submission on 09-08-2019. Therefore, the appeal is taken up for ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia in the case of Commissioner of Income Tax Vs. Tasgaon Taluka S.S.K. Ltd. (supra). In the present appeal the assessee has tried to distinguish the decision of Hon ble Apex Court in the case of Commissioner of Income Tax Vs. Tasgaon Taluka S.S.K. Ltd. (supra). The Co-ordinate Bench in the case of ACIT Vs. Shri Shankar SSK Ltd. (supra) after considering the binding judgment of Hon ble Supreme Court in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. (supra) has restored the issue to the file of Assessing Officer with liberty to raise all contentions before the Assessing Officer. The relevant extract of the order reads as under : 5. The Co-ordinate Bench (supra) after considering the binding judgment of Hon ble Supreme Court 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. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court remitted the matter to the file of the AO for considering the modalities and manner in which SAP/additional purchase price/final price is decided. He has been directed to carry out an exercise of considering 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 and thereafter determine as to what amount would form part of the distribution of profit and the other as deductible expenditure. The relevant findings of the Hon ble Apex Court are reproduced as under:- 9.4. ..... Therefore, to the 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. 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. 7. It is noted that in some 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. 6. From the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for statistical purposes in the aforesaid terms. 7. Thus, 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 cases of ACIT Vs. Shri Shankar SSK Ltd. (supra). The Assessing Officer is further directed to consider the contentions of assessee with respect to SMP vis-a-vis FRP regime. The Assessing Officer shall decide the issue, after affording reasonable opportunity of hearing to the assessee, in accordance with law. 8. Ground No. 2 relating to disallowance of harvesting and transportation charges u/s. 37 of the Act of ₹ 14,73,65,944/-. In some of the appeals, the issue of disallowance of cane harvesting and transportation expenditure incurred by the assessee has been raised. We find that this issue is squarely covered in favour of the assessee by CBDT Circular No. 6/2007, dated 11-10-2007. For the sake of ready reference the same is reproduced here-in-below : 1. Instances have come to the notice of the Board wherein Assessing Officers have disallowed the claim of harvesting and transportation expenses incurred by the Co-operative sugar mills for procuring sugarcan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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