Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2021 (8) TMI 99

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... should be allowed as revenue expenditure. Similarly, the Hon ble Madras High Court in the case of CIT Vs. Aruna Sunrise Hotels Ltd [ 2018 (5) TMI 156 - MADRAS HIGH COURT] held that the payment made to sugarcane growers / members in excess of the administered price determined by the Sugarcane Control Order, 1966 is eligible to be treated as an allowable as the revenue expenditure exclusively incurred for the purpose of business. We find that the order of ld.CIT(A) is in consonance with the CBDT Circular as well as the law laid down by the Hon ble jurisdictional High Court and the Hon ble Madras High Court cited supra, no contrary position has been pointed out to us by the ld. CIT D.R. and therefore, we do not see any reason to interfere .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... tive Society. The Assessing Officer had arrived at such excess price at ₹ 24,35,03,348/- by deducting the FRP net of harvesting and transport expenses which is arrived at ₹ 977.37 as against actual cane price paid per M.T. at ₹ 1,686.60. The amount of disallowance was accordingly calculated at ₹ 709.23 per M.T. by multiplying the quantity of the sugarcane purchased. 3. Being aggrieved by the above disallowance, the assessee preferred appeal before the ld.CIT(A) who vide impugned order accepted above principle that the excess price paid over and above the F.R.P should be disallowed. However, the ld.CIT(A) was of the opinion that the harvesting and transport expenses paid to the sugarcane growers should be allowed a .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... respondent / assessee co-operative society despite due service of notice. 7. We have heard the ld.CIT D.R. and perused the material on record. The issue in the present appeal relates to the allowability of harvesting and transpor expenses paid by the Co-operative Sugar Mills to its farmers / members for purchase of sugarcane. The undisputed facts of the case are that the FRP which is fixed by the Central Government per M.T. is ₹ 1,511.20. It is the contention of the Department that the said price is inclusive of harvesting and transport expenses and therefore, the component of harvesting and transport expenses in the F.R.P. should be disallowed. The other contention of the appellant is that the difference between the F.R.P. net of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... o-op. sugar mills. 9. Further, the Hon ble jurisdictional High Court in the case CIT Vs. Manjara Shetkari Sahakari Sakhar Karkhana Ltd. reported in (2008) 166 Taxman 287, 301 ITR 191 (Bom) held that the expenditure incurred on the consideration of business expediency should be allowed as revenue expenditure. Similarly, the Hon ble Madras High Court in the case of CIT Vs. Aruna Sunrise Hotels Ltd reported in (2018) 93 taxmann.com 361 (Madras) held that the payment made to sugarcane growers / members in excess of the administered price determined by the Sugarcane Control Order, 1966 is eligible to be treated as an allowable as the revenue expenditure exclusively incurred for the purpose of business. We find that the order of ld.CIT(A) i .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates