Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 820 - AT - Income TaxMethodology of fixing the final cane price by the appellant - determining the ‘net surplus’, the cane price as per FRP is deducted as cost of cane and the remaining surplus worked out - HELD THAT:- FRP of sugarcane determined by the Central Government through methodology adopted by factoring in ‘a reasonable margin for the growers of sugarcane on account of risk and profit’ by introducing sub-clause (g) in clause 3(1) of the Sugar Control Order, 1966 and by simultaneously deleting clause 5A of the SCO, whereby profits of the SSK were earlier being distributed and simultaneously declaring under Explanation II of clause 3(3C) of the ECA that 'minimum price’ excludes additional payments under the clause 5A or any other payment made is the most appropriate cane purchase price and fits into the concept of purchase price as per ordinary commercial principles and is in accordance with the provision of section 37(1) of the Income-tax Act. Therefore, any amount paid over and above FRP on the basis of operational profits minus expenses and reserves is not business expenditure under section 37(1) of the Income-tax Act. Accordingly, it is held that the assessing officer was justified in treating the amount paid by the appellant over and above the FRP as distribution of surplus and therefore, such excess payments cannot be allowed as ‘business expenditure’ while computing business profits under the provision of the Income-tax Act. Payment of alleged excess sugarcane price is no more res integra as the tribunal’s latest co-ordinate bench order in Shree Chhatrapati SSK Ltd.. [2022 (7) TMI 1332 - ITAT PUNE] Disallowance representing assessee’s sale of sugar to its members at concessional rates - There is hardly any issue that the very co-ordinate bench has restored the instant issue as well back to the Assessing Officer for his afresh appropriate adjudication. Learned CIT DR could not dispute both the lower authorities have adopted the identical reasoning as it was the issue before the tribunal hereinabove. We thus direct the assessing authority to re-decide the instant latter issue as well in very terms.
|