TaxTMI 
TaxTMI 
2021 (5) TMI 760
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....ted order for the sake of convenience. 2. The assessee is a co-operative society engaged in the business of manufacture and sale of sugar and its by-products. All the appeals rotate around the confirmation of addition on account of Excessive cane Price paid to the Members/Non-Members. 3. We have heard both the sides through Virtual Court and gone through the relevant material on record. It is seen that similar issue came up for consideration before the Tribunal in a batch of 75 appeals led by Manganga Sahakari Sakhar Karkhana Ltd. Vs. ACIT in ITA No.344/PUN/2017 and others. Vide order dated 01-10-2019, the Tribunal held, on this issue, as under : "4. A common issue involved in almost all the appeals is against the addition made by the A....
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....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 SSK Ltd. (2019) 412 ITR 420 (SC). The Hon'ble Apex Court, vide its judgment dated 05-03-2019, has elaborately dealt with this issue. It recorded the factual matrix that the assessee in that case purchased and crushed sugarcane and paid price for 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) Ord....
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....(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 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 Cont....
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....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 after undertaking such an exercise whatever is the profit component is to be considered 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 conside....
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....ermination of the issue. 4. Since the facts and circumstances of the instant appeals are mutatis mutandis similar to those already considered and decided by the Tribunal in the above batch of appeals, in the given circumstances and following the precedent, we set-aside the impugned orders and remit the matter to the file of the AO for deciding the controversy in conformity with the view taken by the Tribunal as extracted above. 5. The contention of Ld. AR that a Review petition has been filed before the Hon'ble Supreme Court against the judgment in the case of CIT Vs Tasgaon SSK Ltd. (2019) 412 ITR 420 (SC) which is still pending and hence the decision thereon should be awaited, is of no consequence. Hundreds of orders have been pass....