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TMI Blog2020 (4) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... wing two minor issues have also emerged in this appeal : i. Government Guarantee Fees. ii. Ceremony Expenses. 4. Before us, at the outset, the ld. DR for the Revenue submitted that the issues raised in the present appeal have already been considered and adjudicated by the Co-ordinate Bench of Tribunal in bunch of appeals. The facts and issues raised in the present appeal are similar. The Ld. DR furnished copy of order of Tribunal dated 14-03-2019 vide which bunch of 162 appeals were disposed of by the Co-ordinate Bench, the lead case being Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT in ITA No.308/PUN/2018 for the assessment year 2013-14. 5. After hearing the ld. DR and after considering the order of Co-ordinate Bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT (supra) etc., we observe that the issues raised in the present appeal have already been considered and decided by the Co-ordinate Bench. A. Excess Cane Price Paid to Sugarcane Suppliers 6. The Co-ordinate Bench after considering the judgment of Hon'ble Supreme Court of India in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. reported as 103 taxmann.com 57 has decided this issue as under : "5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder clause 3 of the Control Order, 1966, which is paid at the beginning of the season, is deductible in the entirety and the difference between SMP determined under clause 3 and SAP/additional purchase price determined under clause 5A, has an element of distribution of profit which cannot be allowed as deduction, the Hon'ble Supreme Court remitted the matter to the file of the AO for considering the modalities and manner in which SAP/additional purchase price/final price is decided. He has been directed to carry out an exercise of considering 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 and thereafter determine as to what amount would form part of the distribution of profit and the other as deductible expenditure. The relevant findings of the Hon'ble Apex Court are reproduced as under:- "9.4. ..... Therefore, to the extent of the component of profit which will be a part of the final determination of SAP and/or the final price/additional purchase price fixed under Clause 5A would certainly be and/or said to be an appropriation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et and other relevant material supplied to the State Government for the purpose of deciding/fixing the final price/additional purchase price/SAP under this clause. The amount relatable to the profit component or sharing of profit/distribution of profit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2) of the Act, as has been held by the Hon'ble Supreme Court supra. Needless to say, the assessee will be allowed a reasonable opportunity of hearing by the AO in such fresh determination of the issue. 7. It is noted that in some of the appeals, the assessees have raised an alternate ground for allowing deduction u/s.80P in respect of the addition. 8. The ld. ARs, in some of the cases, which were represented by them, were fair enough not to press such ground as it is only an alternate gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taxed by the Department under the head "Appropriation of profit". The Hon'ble Summit Court remitted the matter to the CIT(A) for considering, inter alia,: "whether the abovementioned practice of selling sugar at concessional rate has become the practice or custom in the Co-operative sugar industry?; and whether any Resolution has been passed by the State Government supporting the practice?; The CIT(A) would also consider on what basis the quantity of the final product, i.e. sugar, is being fixed for sale to farmers/cane growers/Members each year on month-to-month basis, apart from others from 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Udaipur Distillery Co. Ltd. reported as 268 ITR 305 has held that 'tax', 'duty', 'cess' or 'fee' constituting a class, denotes various kinds of imposts by State in its sovereign power of taxation to raise revenue for the State. Within the expression of each specie each expression denotes different kind of impost depending on the purpose for which they are levied. The Hon'ble High Court further clarified that merely levy of charge as tax or fee is not conclusive of its character. It is only if any amount becomes payable by way of tax, duty, cess or fee, it falls within the purview of section 43B of the Act. Thus, in the light of above, we hold that the Government Guarantee Fees cannot be put in same bracket as tax, cess or duty and hence, no disallowance u/s. 43B of the Act in respect of non-payment of such fee can be made. Accordingly, this issue is decided in favour of the assessee. D. Ceremony Expenses 13. The assessee raised another ground relating to ceremony expenses amounting to Rs. 2,62,511/-. We find that the Commissioner of Income Tax (Appeals) has allowed 1/4th of the expenditure by following the order of Tribunal in the case of Shivamrut Maryadit vs. DCIT, 71 ITD 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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