TMI Blog2019 (9) TMI 1475X X X X Extracts X X X X X X X X Extracts X X X X ..... for statistical purposes. C-class membership fee - It is the case of the assessee that the fee received by the assessee constitutes a capital receipt and the same is not taxable - HELD THAT:- After going through the contents we find the AO erroneously assumed that the same, being collected by the assessee, is of revenue nature. Whereas the assessee holds the same is capital nature. Without deciding the nature of the receipt, the ld. CIT(A) confirmed the addition made by the Assessing Officer. The said issue is required to be remitted to the file of the AO for one more round of adjudication. Accordingly, the Assessing Officer is directed to examine the precedents on this issue and conduct of the assessee in treating the same as capital nature in the earlier/later assessment year. Therefore, we are of the opinion that this issue relates to the C-class membership fee is required to be remanded to the file of the Assessing Officer for fresh adjudication. - ITA No.1273/PUN/2017 - - - Dated:- 4-9-2019 - Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM Assessee by : None Revenue by : Mrs. Shabana Parveen ORDER D. Karunakara Rao, This appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee 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 nonmembers. When the matter finally came up before the Hon ble Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 unanimously agreeable that the extant issue of deduction for payment of excessive price for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer 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 being heard to the assessee in accordance with law. Thus, the relevant grounds raised by the assessee on this issue are allowed for statistical purposes. Sale of Sugar at Concessional rates 8. The Ld. DR submitted that this issue was decided by the Hon ble Apex Court in the case of CIT Vs. Krishna Sahakari Sakhar Karkhana Limited reported as 27 taxmann.com 162. In the present appeal where the issue has been raised either the orders were passed by the Commissioner of Income Tax (Appeals) prior to the date of judgment of Hon ble Supreme Court of India in the case of CIT Vs. Krishna Sahakari Sakhar Karkhana Limited (supra) i.e. 25-09-2012 and in some cases where the orders have been passed by the Commissioner of Income Tax (Appeals) subsequent to the date of said judgment, the Commissioner of Income Tax (Appeals) has not considered the judgment rendered by the Hon ble Apex Court on this issue. 9. We find that the issue of sale of sugar at concessional rates has also been consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e part of the same assessment order to the AO and other to the CIT(A), which is not appropriate. We order accordingly. 10. From the above, it is evident that the issue raised in present appeal is identical to the one already decided by the Co-ordinate Bench of the Tribunal. Thus, in view of the above order by Co-ordinate Bench this issue is restored back to the file of Assessing Officer for de-novo adjudication in similar terms. The Assessing Officer shall grant reasonable opportunity of being heard to the assessee in accordance with law. Thus, the relevant grounds raised by the assessee on this issue are allowed for statistical purposes. C-class membership fee 11. Regarding the third issue of nature of C-class membership fee, it is the case of the assessee that the fee received by the assessee constitutes a capital receipt and the same is not taxable. After going through the contents of para 7 to 7.2 of the order of the CIT(A) as well as para 7 to 7.2 of the assessment order, we find the Assessing Officer erroneously assumed that the same, being collected by the assessee, is of revenue nature. Whereas the assessee holds the same is capital nature. Without deciding the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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