1980 (4) TMI 200

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....d n first appeal in respect of a number of items. Only three items survive for consideration in this appeal. The first ground relates to the payment of Rs. 89,75,516 being the additional price paid to sugar cane growers. This was disallowed by the ITO on the ground that the assessee need not have paid more than the minimum statutory price fixed by the Government. However, only a part of additional price was disallowed under s. 40A(2)(a). The ITO reckoned the addition by fixing the fair price at Rs. 100 per metric ton as against Rs. 122 actually paid. However, as pointed out by the first appl. authority, Rs. 122 per ton was fixed by the Government in the area as a result of representations by the cane growers. The minimum price was only Rs. ....

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....lso no scope for application of s. 40A(2)(a). We have held so in the same assessee's case for the immediately preceding year in ITA No. 2026 (Mds)/78/79 dt. 31st Oct., 1979. The order of the first appl. authority on this point has therefore, to be upheld. 3. The next ground relates to the disallowance of transport subsidy to the extent of Rs. 1,73,101 paid to the cane growers. This issue was also considered by this Tribunal for the immediately preceding year. This was found to be an admissible deduction. Notwithstanding the fact that it is treated as transport expenses, it has been found that in the facts and circumstances of the case that it is nothing more than cane price. For sales-tax purposes, this has been treated as cost of sugar ....