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TMI Blog2022 (8) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... UNTANT MEMBER Assessee by : None Revenue by : Shri M. G. Jasnani DR ORDER PER DR. DIPAK P. RIPOTE , AM : This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals), Pune-2 for the Assessment Year 2006-07 dated 13.09.2019. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Hon. Commissioner of income tax (Appeals) has erred in confirming the addition of Rs. 3,88,87,750/- made by the AO on account of entire difference between sugarcane price paid at the rate of SAP and price payable at the rate of SMP considering it as excessive and unresponciable and as distribution of profit ignoring the decision dated 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came up for consideration before the Tribunal setting aside to the file of AO in ITA No.308/PUN/2018, Majalgaon Sahakari Sakhar Karkhana Ltd., Others order dated 14.03.2019. For the sake of convenience, the relevant finding is reproduced below: 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 matr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the Second Schedule to the Control Order, 1966. Their Lordships noted that at the time when additional purchase price is determined/fixed under clause 5A, the accounts are settled and the particulars are provided by the concerned Co-operative Society as to what will be the expenditure and what will be the profit etc. Considering the fact that Statutory Minimum Price (SMP), determined under clause 3 of the Control Order, 1966, which is paid at the beginning of the season, is deductible in the entirety and the difference between SMP determined under clause 3 and SAP/additional purchase price determined under clause 5A, has an element of distribution of profit which cannot be allowed as deduction, the Hon ble Supreme Court remitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Control Order, 1966. Merely because the higher price is paid to both, members and nonmembers, 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 afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the distribution of profits can only be qua the payments made to the members. In so far as the nonmembers 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. 5. Respectfully following the precedent on this issue (supra), we set aside this issue to the file of Assessing Officer for re-adjudication in the light of the Hon ble Supreme Court s decision in the case of Krishna Sahakari Sakhar Karkhana Ltd., (2012) 27 taxmann.com 162 (SC), order dated 25.09.2012. Accordingly, the grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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