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TMI Blog2022 (7) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... stical purpose. - ITA No. 263/PUN/2018 - - - Dated:- 4-7-2022 - SHRI R. S. SYAL , VICE PRESIDENT AND SHRI S. S. VISWANETHRA RAVI , JUDICIAL MEMBER Assessee by : Smt. Deepa Khare Revenue by : Shri Sardar Singh Meena ORDER PER S.S. VISWANETHRA RAVI , JM : This appeal by the assessee against the order dated 26-12-2017 passed by the Commissioner of Income Tax (Appeals)-13, Pune [ CIT(A) ] for assessment year 2013-14. 2. The assessee in the present appeal is engaged in the business of crushing of sugarcane for the manufacture of sugar and other by-products. The issues raised in this appeal are : i. Disallowance of Excess cane price. ii. Disallowance of sale of sugar at concessional rate. 3. The ld. AR, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 consideration, is squarely covered by the aforesaid judgment of the Hon ble Supreme Court. Respectfully following the precedent, we set-aside the impugned orders on this score and remit the matter to the file of the respective A.Os. for deciding it afresh as per law in consonance with the articulation of law by the Hon ble Supreme Court in the aforenoted judgment. The AO would allow deduction for the price paid under clause 3 of the Sugar Cane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. Thus, in view of the statement made by both the sides that the facts in the present appeal is 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 assessee, in accordance with law. (ii) Sale of Sugar at Concessional rate 7. We find that the issue of sale of sugar at conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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