9911796707
TMI Blog1980 (4) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... Sugar Mills Ltd. for the asst. yr. 1975-76 in an assessment made by the ITO on an income of Rs. 99,24,810 under s. 143(3) of the IT Act, 1961. 2. The assessee is a Co-operative Sugar Mills, which filed a final return of loss of Rs. 2,57,430. Various additions were made to the income returned and reliefs granted n first appeal in respect of a number of items. Only three items survive for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent recovery. The price fixed for other mills was even higher. The price was paid not only to the members, but also to outsiders. Since there was no concession to the members, the question of application of s. 40A(2)(a) cannot possibly arise, It has been held in a number of other cases by a hierarchy of judicial Tribunals including the Supreme Court that the excess price paid for the sugar cane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of some other mills. There is no reason to assume that the payment is excessive. Since the payment made to the outsiders and the members are the same, there is also no scope for application of s. 40A(2)(a). We have held so in the same assessee's case for the immediately preceding year in ITA No. 2026 (Mds)/78/79 dt. 31st Oct., 1979. The order of the first appl. authority on this point has theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar cane growers or merely as meeting an expenses, it is part of the price structure of sugar cane. Hence, the first appl. authority was right in deleting the addition. 4. The last ground is the disallowance of Rs. 2,22,803 on the ground that the loss suffered by the assessee on diversion of sugar cane purchased by it to other sugar mills was not a business loss. It is the assessee's case that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect that the loss would have been greater "if delivery had been taken" in the order of the first appl. Authority had apparently given rise to this argument. The delivery was taken in pursuance of the contract, but the sugar cane was diverted to other mills. Hence, there is no scope for assuming that it is in the nature of a speculative transaction. Under the circumstances, no part of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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