TMI Blog2019 (8) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... old to members at concessional rate is appropriation of profit or not, in the light of the directions given by the Hon ble Supreme Court in the case of Krishna Sahakari Sakhar Karkhana Limited [ 2012 (11) TMI 669 - SUPREME COURT] Addition made on account of Khodki charges - HELD THAT:- As decided in [ 2019 (3) TMI 906 - ITAT PUNE] Khodki charges have been held as deductible by the Hon ble jurisdictional High Court and the recent judgment of Hon ble Supreme Court in Tasgaon Taluka Sahakari Sakhar Karkhana Ltd. [ 2019 (3) TMI 321 - SUPREME COURT] does not cover Khodki charges, we hold that this issue needs to be decided in favour of the assessee. Addition made on account of VSI contribution - HELD THAT:- As in respect of the other SSK matters in [ 2019 (3) TMI 906 - ITAT PUNE] CIT(A) has determined this issue in favour of the assessee. No material has been placed on record to show that this order of the Tribunal has been reversed or modified in any manner by the Hon ble High Court. Respectfully following the precedent, we decide this issue in favour of the assessee. - 959/PUN/2013, 988/PUN/2013, 1022/PUN/2013, 1296/PUN/2013, 1023/PUN/2013, 1297/PUN/2013 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in that case purchased and crushed sugarcane and paid price for the purchase during crushing seasons 1996-97 and 199798, firstly, at the time of purchase of sugarcane and then, later, as per the Mantri Committee advice. It further noted that the production of sugar is covered by the Essential Commodities Act, 1955 and the Government issued Sugar Cane (Control) Order, 1966, which deals with all aspects of production of sugarcane and sales thereof including the price to be paid to the cane growers. Clause 3 of the Sugar Cane (Control) Order, 1966 authorizes the Government to fix minimum sugarcane price. In addition, the additional sugarcane price is also payable as per clause 5A of the Control Order, 1966. The AO in that case concluded that the difference between the price paid as per clause 3 of the Control Order, 1966 determined by the Central Government and the price determined by the State Government under clause 5A of the Control Order, 1966, was in the nature of `distribution of profits and hence not deductible as expenditure. He, therefore, made an addition for such sum paid to members as well as non-members. When the matter f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce the statement of accounts, balance sheet and the material supplied to the State Government for the purpose of deciding/fixing the final price/additional purchase price/SAP under Clause 5A of the Control Order, 1966. Merely because the higher price is paid to both, members and non-members, qua the members, still the question would remain with respect to the distribution of profit/sharing of the profit. So far as the non-members are concerned, the same can be dealt with and/or considered applying Section 40A (2) of the Act, i.e., the assessing officer on the material on record has to determine whether the amount paid is excessive or unreasonable or not........ 9.5 Therefore, the assessing officer will have to take into account the manner in which the business works, the modalities and manner in which SAP/additional purchase price/final price are decided and to determine what amount would form part of the profit and after undertaking such an exercise whatever is the profit component is to be considered as sharing of profit/distribution of profit and the rest of the amount is to be considered as deductible as expenditure. 6. Both the sides are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present set of appeals are identical, the issue relating to excess sugarcane price paid by the assessee is restored to the file of Assessing Officer with similar directions as above in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT (supra). The Assessing Officer shall decide the issue after affording reasonable opportunity of hearing to the respective assessees, in accordance with law. Respectfully following the aforesaid decision, the issue is restored to the file of Assessing Officer with similar directions as hereinabove mentioned. Thus, grounds No. 2 to 5 raised in appeal by the Revenue are allowed for statistical purposes. 6. Ground No.6 is with regard to confirmation of addition made in the assessment on account of sale of sugar to members and non members . 7. We observe that this issue has already been considered and adjudicated by the Co-ordinate Bench of the Tribunal, Pune in respect of the other SSK matters in ITA No.50/PUN/2012 Others. That with regard to addition made in the assessment on account of sale of sugar to members and non-members, the Co-ordinate Bench of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Diwali? The issue under consideration can be decided by an appropriate lower authority only on the touchstone of the relevant factors noted in the above judgment. In our considered opinion, it would be just and fair if the impugned orders on this score are set aside and the matter is restored to the file of AOs, instead of to the CITs(A), for fresh consideration as to whether the difference between the average price of sugar sold in the market and that sold to members at concessional rate is appropriation of profit or not, in the light of the directions given by the Hon ble Supreme Court in the case of Krishna Sahakari Sakhar Karkhana Limited (supra). Restoration to the AO is necessitated because, following the judgment of the Hon ble Apex Court in the case of Tasgaon Taluka S.S.K. Ltd. (supra), we have remitted the issue of payment of excessive price to the file of AO, and as such, the instant issue cannot be sent to ld. CIT(A) as it would amount to simultaneously sending one part of the same assessment order to the AO and other to the CIT(A), which is not appropriate. We order accordingly. 8. Both the sides have stated at the Bar that the issue raised in pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r at the time of harvesting. This issue came up for consideration before the Special Bench of the Tribunal in DCIT Vs. Manjara Shetkari SSK Ltd. (2004) 85 TTJ (Mum.)(SB) 369, which granted deduction for said expenses. On further appeal by the Revenue to the Hon ble Bombay High Court, their Lordships in the aforenoted case approved the view taken by the Tribunal allowing deduction for payment of such Khodki charges. The ld. CIT(A) has recorded that the SLP filed by the Department in the case of Jadamba SSK Ltd., on similar issue, has been dismissed by the Hon ble Supreme Court on 23-03-2009. In view of the fact that Khodki charges have been held as deductible by the Hon ble jurisdictional High Court and the recent judgment of Hon ble Supreme Court in Tasgaon Taluka Sahakari Sakhar Karkhana Ltd. (supra) does not cover Khodki charges, we hold that this issue needs to be decided in favour of the assessee. Respectfully following the aforesaid findings, this issue needs to be decided in favour of the assessee and against the Revenue. Hence, ground No.7 and 8 raised in Revenue‟s appeal are dismissed. 10. Ground No.9 and 10 are general in nature an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Co-ordinate Bench of the Tribunal, Pune in respect of the other SSK matters in ITA No.308/PUN/2018 Others. That with regard to addition made on account of provision for VSI contribution, the Co-ordinate Bench of the Tribunal has held as follows: V. PROVISION FOR VASANTDADA SUGAR INSTITUTE (VSI) CONTRIBUTION : 17. Another issue raised in some of the appeals is against the confirmation of disallowance of contribution to Vasantdada Sugar Institute (VSI). The AO observed that the assessee made provision for Vasantdada Sugar Institute (VSI) contribution and claimed weighted deduction at 125% u/s.35(1)(ii) of the Act. The said amount was not paid to the institute. The same being only in the nature of provision, the AO did not allow deduction u/s.35(1)(ii). The ld. CIT(A) decided this issue in favour of the assessee by following an order passed by the Pune Benches of the Tribunal in the case of Bhima S.S.K. Ltd. (ITA No.1414/PUN/2000). 18. We have heard both the sides and gone through the relevant material on record. It is found that the ld. CIT(A) has determined this issue in favour of the assessee by following the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tistical purposes. 24. In the result, appeal of the assessee is allowed for statistical purposes. ITA No.1023/PUN/2013 ( By Revenue) A.Y. 2008-09 25. Ground No. 1 to 3 relates to Excess Cane Price paid to Sugarcane Suppliers‟. Ground No.4 deals with sale of sugar at concessional rate‟. Ground No.5 is with regard to provision for VSI provision‟. Ground No.6 and 7 are general in nature. We observe that Revenue has raised similar and identical grounds in ITA No.1022/PUN/2013. Hence, the decision rendered in ITA No.1022/PUN/2013 would apply mutatis-mutandis in this appeal (ITA No.1023/PUN/2013) also. 26. In the result, appeal of the Revenue is partly allowed for statistical purposes. ITA No.1297/PUN/2013 ( By Assessee) A.Y.2008-09 27. At the outset, we notice that the present appeal is time barred by 21 days. The assessee has filed an affidavit along with condonation of delay petition. We have gone through the condonation petition as well as the affidavit and have found that reasons specified therein are justified and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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