Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

SHREE MADHI VIBHAG KHAND UDYOG SAHAKARI MANDLI LIMITED Versus INCOME TAX OFFICER

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 Government under sugar Sugar Control Order ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed:- 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 ORAL JUDGMENT (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: Return of income for the year under con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sugar factories were following a practice of deciding the purchase price of sugarcane after finalisation of its accounts and its profits in the financial year subsequent to procurement of sugar cane. Till the time of finalisation of the purchase price, ad hoc payments were distributed amongst the sugarcane farmers. The final purchase price is declared after arriving at the profits earned by the co-operative sugar factories during the year of procurement of sugar cane. Thus, the ad hoc payments .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er The Essential Commodities Act, 1955 . By this order, fixation of a Statutory Minimum Price (SMP) by the Central Government every year, for every sugar factory, came into place. This price is fixed as per the recommendations of the Commission for Agricultural Costs and Prices, after consulting the State Government, associations of sugar industries and sugarcane growers and after considering all factors like cost of production of sugarcane, returns to growers from alternate crops, availability .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e to be taxed. During the course of assessment proceedings, made in the cases of M/s. Shree Chalthan Vibhag Khand Udyog Sahakari Mandli Ltd. And M/s. Shri Khedut Sahakari Khand Udyog Mandli Ltd., it was seen that those sugar factories had purchased sugarcane over and above the Minimum Support Price (SMP)/Fair and Remunerative Price (FRP) declared by the Central Government. It was also seen therein that during a crushing season, the co-operative sugar factories of South Gujarat are in the practic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

amount to be paid to sugarcane suppliers was neither before the crushing season nor during the crushing season. This practice of deciding the cane price after the end of crushing season at the time of finalisation of their accounts, was being followed by them so that these sugar factories came to know of the profits earned by it in that crushing season by that time and so that the cane purchase price can be so adjusted that there would be no incidence of tax in the hands of the co-operative soci .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Government. Thus, it is reasonable to consider that in absence of any purchase price fixed by the co-operative sugar factories for sugar cane, it would be reasonable to adopt the SMP/FRP as the purchase price. 5. The case of the assessee for the year under consideration was also perused from this angle. It was seen that the assessee had purchased 1,14,36,300/- quintals of sugarcane during the year for a consideration of ₹ 3,01,78,80,994/-. The average sugarcane purchase price of the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the society for the year was 1,14,36,300/- quintals, the excess payment made during the year to its members works out to ₹ 1,36,,06,90,974/- (118.98 x 1,14,36,300/-). Thus, the purchases of the assessee were inflated to the extent of ₹ 1,36,06,90,974/- upon which, the assessee ought to have paid taxes and thereafter distributed it to its members as dividend. The Real Income theory states that the income that was taxable under the Income Tax Act is the income computed on ordinary co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Update Alerts     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version