Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 1234 - AT - Income TaxDisallowance on account of Fair & Remunerative Price (FRP) in addition to Statutory Minimum Price (SMP) - CIT (A) confirming action of AO treating additional price paid over and above FRP (Fair & remunerative price) to the cane growers amounted to distribution of profits by the appellant - HELD THAT:- Hon'ble Supreme Court in the case of CIT v. Tasgaon Taluka S. S.K. Ltd.. [2019 (3) TMI 321 - SUPREME COURT] held that as per Clause 3 of Control Order 1966, Government in the official Gazette, from time to time fixed the minimum price of sugar cane (SMP) to be paid to farmers. So far as determination of SMP is concerned it is at the beginning of the season. The additional purchase price (SAP) is determined at the end of the season when accounts are settled under Clause-5A. The difference of amount of SMP & SAP has an element of profit and/or one of the components would be profit. The additional price is paid as a matter of incentive. Thus, the entire whole amount of difference between SMP and the SAP per se cannot be said to be an appropriation of profit. Only that part/component of profit, while determining the final price worked out/SAP/Additional price would be and/or the said to be an appropriation of profit and for that an exercise is to be done by the AO by calling upon the assessee to produce the statement of accounts, balance sheet and the material supplied to the State Government for the purpose of fixing the final price/additional price/SAP under Clause 5A of control order 1966. We restore the file of the AO for deciding the issue as afresh in accordance with the decision to Hon'ble Supreme Court and will pass the order in accordance with law. Needless to direct that before passing the order the AO will consider the facts already available on record and shall grant opportunity of hearing to the assessee. The assessee is also directed to provide all the necessary details, evidences and information to the AO in accordance with the direction of Hon'ble Apex Court in the case of Tasgaon Taluka (supra). Appeal of the assessee is allowed for statistical purposes.
|