2016 (6) TMI 602

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.... him for re-opening the assessment. Such reasons read as under: "The Assessee is a co-operative society registered under Gujarat Co-operative society Act, engaged in business of manufacturing and sales of sugar and its byproducts viz., Bagasse, Press mud and molasses. The assessee filed its return of income for A.Y. 2010-11 on 24.9.2010, declaring total income of Rs. NIL. The return was processed under section 143(1) of the I.T.Act, 1961 on 16.4.2011. On perusal of order issued by Ministry of Consumer affairs, food and public distribution, it is observed that the Statutory Minimum Price/Fair and Remunerative Price (SMP/FRP) for the F.Y.2009-10 was fixed at Rs. 1325.80 per MT. As the assessee has purchase 243829 MT of sugarcane from it....

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.... deductible-Any expenditure (not being expenditure of the nature described in section 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession. From the above findings, it is crystalised that methodology adopted by the assessee for determining "final cane price" clearly envisages distribution of operational profits ("surplus") from the manufacture of sugar. It is beings out that while working out the business income by the assessee, the commercial principles of accounting and "real income theory" i....