2025 (3) TMI 1869

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....d in adding to income of Rs. 15,54,94,967/- being excess sugar cane price paid to members and non Members. The addition made by the Assessing Officer be deleted. 2. Not appreciating the fact that the price determined by State Government under Maharashtra Regulation of Sugarcane Price(Supplied to factories) Act, 2013 is an allowable deduction u/s.36(1)(xvii) of the Income Tax Act. 3. The appellant craves leave to add, alter, amend or revise the above ground of appeal at the time of hearing of the above appeal." Submission of ld.AR : 2. Ld.AR submitted that the state government has decided FRP of Rs. 2,500/- per metric ton. Ld.AR submitted copy of the relevant order. Ld.AR submitted that assessee has purchased sugar ca....

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....the minimum price as per FRP applicable at the relevant time. While Section 5(3) reads as 'Sec 5(3) The actual payment for Sugarcane fixed by the Board shall be paid in two steps. The first would be payment of FRP. Balance payment of Sugarcane dues will be paid subsequent to publication of half yearly ex-mill prices and values, determined by the Board in accordance with the provisions of clause (a) of section 4.' Cumulative reading of these provisions make this abundantly clear that the price paid under the State Act calculated by RSF (Revenue Sharing Formula) is to be mandatorily paid by sugar factory even if it is in excess of FRP. We humbly submit that THE SUGARCANE (CONTROL) ORDER, 1966 under Section 3....

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....rough State-level Acts/Orders or other legal instruments that regulate the purchase price for sugarcane including State Advised Price, which may be higher than the Statutory Minimum Price/ Fair and Remunerative Price fixed by the Central Government.' Cumulative reading of all above makes it abundantly clear that the cane price paid by assessee of Rs. 2,500 PMT is an allowable deduction u/s 36(1)(xvii) and AO has erred in adding to income Rs 15,54,94,967." Submission of ld.DR: 3. Ld.DR for the Revenue relied on the order of AO &ld.CIT(A) Findings &Analysis : 4. We have heard both the parties and perused the records. Assessee is a Co-operative Sugar Factory. 4.1 As per assessment order, Assessee has paid Rs. 2,500/....