TMI Blog2019 (9) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with law. AO shall also give due consideration to the issues raised by the assessee with effect to applicability/non-applicability of judgment of Hon ble Apex Court as the case may be and decide the issue accordingly. Thus, the issue of excess cane price paid to sugarcane suppliers is allowed for statistical purposes in the aforesaid terms. Provision for Vasantdada Sugar Institute (VSI) Contribution - HELD THAT:- 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. ( 2019 (3) TMI 906 - ITAT PUNE ) . 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 Disallowance of contribution towards Area Development Fund - HELD THAT:- Both sides are unanimous in stating that the issue of disallowance of Area Development Fund in present set of appeals is identical to the one already decided by the Co-ordinate Bench. In the light of directions of Co-ordinate Bench on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the ld. DR unanimously stated that the common issue in all the appeals relating to taxability of excess sugarcane price paid by the assessees to farmers for supply of sugarcane have already been considered and adjudicated by the Co-ordinate Bench of Tribunal in bunch of appeals with the lead case DCIT vs. Vasant Rao Dada Patil SSK Ltd. in ITA Nos.50 to 52/PUN/2012 for the assessment years 1992-93, 1994-95 1996-97, respectively vide order dated 20.03.2019. Both sides prayed that in line with aforesaid order of Tribunal the present set of appeals be restored to Assessing Officer with similar directions. 3. We have heard the submissions of rival sides and have considered the order of Co-ordinate Bench in the case of DCIT vs. Vasant Rao Dada Patil SSK Ltd. (supra). The Co-ordinate Bench after considering the binding 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 the 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice/additional purchase price/SAP under this clause. The amount relatable to the profit component or sharing of profit/distribution of profit paid by 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all issues open for consideration and examination by the Assessing Officer. The assessees are at liberty to raise all their contentions before Assessing Officer. 7. Thus, in view of the assertions made by both the sides that the facts in the present set of appeals being identical to the issue relating to excess sugarcane price paid by the assessee the issue is restored to the file of Assessing Officer with similar directions as above in the cases of M/s. Vasant Rao Dada Patil SSK Ltd. (supra) and also consider the contentions of assessee with respect to SMP vis-a-vis FRP regime, where ever raised. The Assessing Officer shall decide the issue, after affording reasonable opportunity of hearing to the respective assessees, in accordance with law. The Assessing Officer shall also give due consideration to the issues raised by the assessee with effect to applicability/non-applicability of judgment of Hon ble Apex Court as the case may be and decide the issue accordingly. Thus, the issue of excess cane price paid to sugarcane suppliers is allowed for statistical purposes in the aforesaid terms. 8. Apart from the primary issue relating to excess cane pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. It also noted the contention of the assessee in para 45 that the realisations made towards the Area Development Fund were impressed with the specific legal obligation to spend the money for specified purposes which were unrelated to the business of the sugar factory and hence, could not be treated as income of the assessee. Eventually, the Hon ble Supreme Court remitted the matter back for fresh determination. It is noticed that in the appeals under consideration, the ld. CITs(A) have not considered the impact of the judgment of the Hon ble Supreme Court in Siddheshwar Sahakari Sakhar Karkhana Limited (supra) and decided the issue without taking note of the factors directed to be considered in the aforenoted case. In view of the above decision of Hon ble Supreme Court, we set-aside such impugned orders and remit the matter to the file of the respective AOs for deciding the issue afresh in conformity with the guidelines laid down by the Hon ble Apex Court in the above judgment. 10.1 Both sides are unanimous in stating that the issue of disallowance of Area Development Fund in present set of appeals is identical to the one already d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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