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2016 (6) TMI 602 - GUJARAT HIGH COURT

2016 (6) TMI 602 - GUJARAT HIGH COURT - TMI - Reopening of assessment - taxability of income of the sugarcane - reasons to believe - Held that:- It is undoubtedly true that the original return was not taken in scrutiny by the Assessing Officer and was merely accepted under section 143(1) of the Income-tax Act, 1961. However, the central question of taxability of income of the sugarcane in the background of reasons recorded had come up before this Court on couple of occasions in the past. A Divis .....

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Officer had not carried out any inquiry before coming to a contrary conclusion and that he should not have a reasonable belief for forming the opinion that the income chargeable to tax had escaped the assessment. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 3994 of 2016 - Dated:- 13-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KUR .....

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he assessee filed its return of income for A.Y. 2010-11 on 24.9.2010, declaring total income of Rs. NIL. The return was processed under section 143(1) of the I.T.Act, 1961 on 16.4.2011. On perusal of order issued by Ministry of Consumer affairs, food and public distribution, it is observed that the Statutory Minimum Price/Fair and Remunerative Price (SMP/FRP) for the F.Y.2009-10 was fixed at ₹ 1325.80 per MT. As the assessee has purchase 243829 MT of sugarcane from its members (farmers) du .....

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ollowed system of SMP/FRP while payment for sugarcane purchase from its members. What is in fact, followed is the Final Cane Price . The final cane price was determined by the assessee after the completion of financial year and therefore, the entries made in the books of accounts of assessee reflecting expenditure incurred by way of purchases are not real time entries. It is further noticed that the assessee has not made provision at the end of the accounting period (31st March) but the excess p .....

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-Any expenditure (not being expenditure of the nature described in section 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of business or profession. From the above findings, it is crystalised that methodology adopted by the assessee for determining final cane price clearly .....

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