TMI Blog2017 (8) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... are completely unrelated and therefore, to say that it is directly related to assessee’s agricultural income from its own land is sans any material. The similar claim of expenses have always been allowed by the Assessing Officer in the scrutiny assessments right from the assessment year 2001-02 to 2006-07. CIT (Appeals) has referred to CBDT’s circular No. 578 dated 15.2.1990, wherein CBDT has clarified and upheld that the expenditure incurred by the sugar factory on cane development programmes is eligible for deduction u/s 37(1). - Decided in favour of assessee. - ITA No. 5180/Del/2012 - - - Dated:- 28-8-2017 - Shri G.D. Agrawal And Shri Amit Shukla, JJ. Revenue by: Shri S. S. Rana, CIT DR Assessee by: None ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 73,51,878/-. 3. Before the Learned CIT (Appeals), the assessee clarified that in the A.Y. 2006-07 the Assessing Officer had disallowed the claim of exemption of agricultural income and also disallowed the entire cane development expenses but no addition was made on this account to the income of the assessee. Explaining the entire facts before the Learned CIT (Appeals), the assessee submitted that the assessee was in possession of total land of 39.530 hectares of land, out of which 29.957 hectares was for use of agricultural activities which was for sugar cane production. The sugar cane produced from own agricultural land was used for its own crushing purposes, but cane development expenses have been incurred on the land o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment Expenses (Rs.) % age 2001-02 5.87/- 9,93,612/- 1.69 2002-03 41.14/- 2,30,415/- 0.06 2003-04 51.87/- 72,88,071/- 1.40 2004-05 85.13/- 49,10,303/- 0.58 2005-06 76.07/- 48,21,872/- 0.63 2006-07 100.36/- 72,89,737/- 0.73 4. The Learned CIT (Appeals) after considering the entire gamut of facts and materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the sugar cane produced by the farmers on their own land which are in the vicinity of 10 to 15 kilo meters of radius of the assessee s factory. These expenses include payments on account of seeds, fertilizer, transport subsidy to farmers, seed survey expenses, salary to staff engaged on the said cane development activities, irrigational equipments, computers and software with a view to educate farmers etc. These expenses have to be incurred by the assessee as per the direction or mandate of the State Government; and have been debited as cane development expenses in the profit and loss account which is part of the assessee s main activity of manufacturing of sugar crystals. The cane development expenses debited to the profit loss acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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