TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 286
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.... of Income Tax (Appeals)-6, Pune has erred in disallowing and adding back an amount of Rs. 12,61,374/- on account of VSI contribution. 4. On the facts and in the circumstances of the case and in law of the learned Commissioner of Income Tax (Appeals)-6, Pune has erred in disallowing and adding back an amount of Rs. 12,37,350/- on account of Chief Minister Relief Fund. 5. The appellant craves for the leave, add, alter, amend, modify and delete any or all the above grounds of appeals before or at the time of hearing." 2. At the time of hearing, neither the assessee nor his authorized representative was present. The submissions of the Ld. DR were recorded and the case was discussed on merits. 3. The brief facts in this case are that the assessee is a co-operative society engaged in the business of manufacture and sale of white sugar and its by-products such as molasses, press, mud, bagasse etc. The main raw material used in the manufacturing process is sugarcane. The assessee filed its return of income for the assessment year 2013-14 on 27.09.2013 declaring total income at Rs. 4,00,21,160/- after claiming deduction at Rs. 6,88,55,044/- u/s.80IA(4)(iv)(a) of the Income Tax Act, 1....
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....tual 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) Order, 1966, which deals with all aspects of production of sugarcane and sales thereof including the price to be paid to the cane growers. Clause 3 of the Sugar Cane (Control) Order, 1966 authorizes the Government to fix minimum sugarcane price. In addition, the additional sugarcane price is also payable as per clause 5A of the Control Order, 1966. The AO in that case concluded that the difference between the price paid as per clause 3 of the Control Order, 1966 determined by the Central Government and the price determined by the State Government under clause 5A of the Control Order, 1966, was in the nature of `distribution of profits' and hence not deductible as expenditure. He, therefore, made an addition for such sum paid to members as well as non-members. When the matter finally came up befo....
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....ce 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. Merely because the higher price is paid to both, members and non-members, 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 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 ....
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....e of Assessing Officer with similar directions as above in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT (supra). The Assessing Officer shall decide the issue after affording reasonable opportunity of hearing to the respective assessee, in accordance with law. Thus, Ground No.1 raised in appeal by the assessee is allowed for statistical purposes. B. Ground No.2 : Sale of sugar at Concessional Rate : 8. We find that the issue of sale of sugar at concessional rates has also been considered by the Co-ordinate Bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT (supra) and in the case of ACIT Vs. Shri Shankar SSK Ltd. (supra.) has held as under : "11. Having heard both the sides and gone through the relevant material on record, it is observed that the AO made addition of 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 Co....
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.... purposes. C. Ground No.3 : provision for Vasantdada Sugar Institute (VSI) Contribution 10. The Ld. DR submitted that the issue of provision for VSI contribution has been decided by the Tribunal while adjudicating bunch of SSK appeals in Majalgaon SSK Ltd. Vs. ACIT in ITA No. 308/PUN/2018 for assessment year 2013-14 decided on 14-03-2019. The Co-ordinate Bench followed the decision rendered in the case of Bhima S.S.K. Ltd. in ITA No. 1414/PUN/2000. We observe that the Co-ordinate Bench has decided this issue in favour of assessee by holding as under: "18. We have heard both the sides and gone through the relevant material on record. It is found that the ld. CIT(A) has determined this issue in favour of the assessee by following the order passed by the Pune Benches of the Tribunal in the case of Bhima S.S.K. Ltd. (supra). No material has been placed on record to show that this order of the Tribunal has been reversed or modified in any manner by the Hon'ble High Court. Respectfully following the precedent, we decide this issue in favour of the assessee." Thus, in view of the above findings of the Tribunal, this ground is decided in favour of the assessee. Hence, Ground No.3 ra....