TaxTMI 
TaxTMI 
2019 (8) TMI 1326
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.... lead case. ITA No.959/PUN/2013 ( By Revenue) A.Y. 2009-10 3. Ground No.1 is general in nature and hence, requires no adjudication. 4. Ground No. 2 to 5 relates to the "additional payment on account of cane price under Clause 5A of the Sugar Control Order". 5. That both the parties herein at the outset submitted that the issue raised in the present set of appeals by the assessee and the Revenue have already considered and adjudicated by the Co-ordinate Bench of the Tribunal, Pune in respect of the other SSK matters ITA No.50/PUN/2012 & Others. That with regard to "Excess Cane Price paid to Sugarcane Suppliers, the Co ordinate Bench of the Tribunal has held as follows: "Excess Cane Price Paid to Sugarcane Suppliers 4. The Co-ordinate Bench after considering the judgment of Hon'ble Supreme Court of India in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. reported as 103 taxmann.com 57 has decided this issue as under : "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 r....
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....ribution of profit which cannot be allowed as deduction, the Hon'ble Supreme Court remitted the matter to the file of the AO for considering the modalities and manner in which 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 be an appropriation of profit. However, at the same time, the entire/whole amount of difference between the SMP and the SAP per se cannot be said to be an appropriation of profit. As observed hereinabove, only that part/component of profit, while determining the final price worked ....
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....the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members 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. 7. It is noted that in some of the appeals, the assessees have raised an alternate ground for allowing deduction u/s.80P in respect of the addition. 8. The ld. ARs, in some of the cases, which were represented by them, were fair enough not to press such ground as it is only an alternate ground and having become infructuous in view of the restoration of the matter to the AO. No argument was advanced in support of such ground in other cases, even where the ld. ARs participated in proceedings before the Tribunal. Therefore, the said alternate groun....
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....f the difference between the market price and the concessional price at which sugar (final product) was given to farmers and cane growers. In this regard, it is observed that this issue has been considered by the Hon'ble Supreme Court in the case of CIT Vs. Krishna Sahakari Sakhar Karkhana Limited (2012) 27 taxmann.com 162 (SC). Vide judgment dated 25-09-2012, the Hon'ble Supreme Court noticed that the difference between the average price of sugar sold in the market and the price of sugar sold by the assessee to its members at concessional rate was taxed by the Department under the head "Appropriation of profit". The Hon'ble Summit Court remitted the matter to the CIT(A) for considering, inter alia,: "whether the abovementioned practice of selling sugar at concessional rate has become the practice or custom in the Co-operative sugar industry?; and whether any Resolution has been passed by the State Government supporting the practice?; The CIT(A) would also consider on what basis the quantity of the final product, i.e. sugar, is being fixed for sale to farmers/cane growers/Members each year on month-to-month basis, apart from others from Diwali?" The issue under consideration can ....
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....e as per the order of the Director of Sugar. It was further explained that at the time of harvesting, the harvesting labour cut more part of the upper side of the crop and therefore, to compensate loss in weight to the grower, the said Khodki charges were paid to the farmers. The AO was not satisfied with the explanation tendered on behalf of the assessee. He noted that the Commissioner of Sugar, on behalf of Government of Maharashtra, was issuing directions for payment of Khodki charges only on the basis of proposal sent by the respective assessees. The ld. CIT(A) deleted the addition by relying on the judgment of Hon'ble Bombay High Court in CIT Vs. Manjara Shetkari SSK Ltd. and others (2008) 301 ITR 191 (Bom.), against which the Revenue has come up in appeal before the Tribunal. 23. We have heard both the sides and gone through the relevant material on record. It is seen that Khodki charges were incurred as per the directions of the Director of Sugar to compensate for the farmers' loss for unevenly cutting of cane sugar at the time of harvesting. This issue came up for consideration before the Special Bench of the Tribunal in DCIT Vs. Manjara Shetkari SSK Ltd. (2004) 85 TTJ (M....
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.... Following the same, we restore this issue back to the file of Assessing Officer with similar directions as mentioned hereinabove. Thus, ground No.1 to 3 raised by the Revenue are allowed for statistical purposes. 16. Ground No.4 of the Revenue‟s appeal is with regard to "Sale of sugar at concessional rate." Since this issue is identical to grounds No. 6 of Revenue‟s appeal (ITA 959/PUN/2013) and we have adjudicated the issue in preceding paragraphs. Following the same, we restore this issue back to the file of Assessing Officer with similar directions as mentioned hereinabove. Thus, ground No.4 raised by the Revenue are allowed for statistical purposes. 17. Ground No.5 is with regard to "addition made on account of VSI contribution." 18. We observe that this issue has already been considered and adjudicated by the Co-ordinate Bench of the Tribunal, Pune in respect of the other SSK matters in ITA No.308/PUN/2018 & Others. That with regard to addition made on account of provision for VSI contribution, the Co-ordinate Bench of the Tribunal has held as follows: "V. PROVISION FOR VASANTDADA SUGAR INSTITUTE (VSI) CONTRIBUTION : 17. Another issue raised in some of the ....
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....ceding paragraphs. Following the same, we restore this issue back to the file of Assessing Officer with similar directions as mentioned hereinabove. Thus, ground No.1 raised by assessee the is allowed for statistical purposes. 23. Ground No.2 is with regard to "sugar sold at concessional rate". Since this issue is identical to grounds No.6 of Revenue‟s appeal (ITA 959/PUN/2013) and we have adjudicated the issue in preceding paragraphs. Following the same, we restore this issue back to the file of Assessing Officer with similar directions as mentioned hereinabove. Thus, ground No.2 raised by the assessee is allowed for statistical purposes. 24. In the result, appeal of the assessee is allowed for statistical purposes. ITA No.1023/PUN/2013 ( By Revenue) A.Y. 2008-09 25. Ground No. 1 to 3 relates to "Excess Cane Price paid to Sugarcane Suppliers‟. Ground No.4 deals with "sale of sugar at concessional rate‟. Ground No.5 is with regard to "provision for VSI provision‟. Ground No.6 and 7 are general in nature. We observe that Revenue has raised similar and identical grounds in ITA No.1022/PUN/2013. Hence, the decision rendered in ITA No.1022/PUN/2013 would ....