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2022 (1) TMI 1063 - AT - Income TaxExcess payment for sugar cane over and above SMP/FRP - CIT(A) directed the assessing officer to recompute the FRP on certain formula as per the order dated 22.12.2013 of Ministry of Consumer affair, Department of Food and Public Administration - HELD THAT:- We find that on identical issue and on similar set of fact in SHREE KHEDUT SAHAKARI KHAND UDYOG MANDLI LTD. VERSUS INCOME TAX OFFICER, WARD-1, BARDOLI [2019 (8) TMI 1047 - ITAT SURAT] considering the decision of Hon’ble Supreme Court in the case of CIT vs. Tasgaon Taluka S.S.K. Ltd., [2019 (3) TMI 321 - SUPREME COURT] wherein set-aside the impugned orders on this score and remit the matter to the file of the AO for deciding it afresh as per law in consonance with the articulation of law by the Hon’ble Supreme Court in the afore noted judgment. The AO would allow deduction for the price paid under clause 3 of the Sugar Cane (Control) Order,1966 and then determine the component of distribution of profit embedded in the price paid under clause 5A, by considering the statement of accounts, balance sheet and other relevant material supplied to the State Government for the purpose of deciding/fixing the final price/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. Thus the grounds of appeal raised by assessee are restored back to the file of Assessing Officer to decide the issue afresh in accordance with law to follow the decision of coordinate Bench of this Tribunal in the case of Shree Khedut Sahakarai Khand Udyog Mandli Ltd. vs. Income Tax Officer, (supra).
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