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2016 (6) TMI 745 - GUJARAT HIGH COURT

2016 (6) TMI 745 - GUJARAT HIGH COURT - TMI - Reopening of assessment - taxability of income of the sugarcane - Held that:- A Division Bench of this Court in the case of Shri Chalthan Vibhag Khand Udylog Mandli Ltd. vs. Deputy Commissioner of Income-Tax, reported in [2015 (7) TMI 297 - GUJARAT HIGH COURT ], had quashed the notice for re-opening which was based on identical reasons, it was held that the difference between the price to be paid to cane growers and the purchase price declared by the .....

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ECIAL CIVIL APPLICATION NO. 4014 of 2016 - Dated:- 14-6-2016 - 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 (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) The petitioner is a sugar co-operative society and has challenged the notice for re-opening assessment issued by the Assessing Officer for the assessment year 2010-11. The Assessing Officer has recorded reasons for re-opening which read as under: The Ass .....

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r Affairs, Food and Public Distribution, it is observed that the Statutory Minimum Price (SMP) for the F.Y.2009-10 was fixed at ₹ 1558.70 per MT. As the assessee has purchased 920082.950MT of sugarcane from its members (farmers) during the F.Y.2009-10, the cost of sugarcane purchase considering the SMP comes to ₹ 143,41,33,294/-. On perusal of P & L account, it is observed that the assessee has shown purchase of sugarcane to the tune of ₹ 278,6,2,33,571/-. Therefore, the as .....

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ccounts 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 payment made after the financial year by passing a Resolution of the Board. Thus, in this way, the assessee has debited entire cost of purchase after completion of financial year. Ordinarily what would be debited would be the present crystalised liability while a provision .....

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e 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 envisages distribution of operational profits ( surplus ) from the manufacture of sugar. It is brings out that while working out the business income by the assessee, the commercial principles of accounting and real income theory is grossly violated. What are to be asses .....

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