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TMI BlogDisallowance of the assessee's business expenditure claims related to the purchase of sugarcane from member farmers, as well as the treatment of additional sugarcane price paid to growers as an appropriation of profits.X X X X Extracts X X X X X X X X Extracts X X X X ..... less Appeal Centre Delhi and the Commissioner of Income Tax (Appeals) for the Assessment Years (AY) 2012-13, 2013-14, and 2014-15. The central issue is the Assessing Officer's disallowance of the assessee's business expenditure claims related to the purchase of sugarcane from member farmers, as well as the treatment of additional sugarcane price paid to growers as an appropriation of profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee argued that the government-fixed SMP for sugarcane was ₹1,832.00 per metric ton (MT), but they paid an excess amount of ₹882.78 per MT to their members. This excess payment, totaling ₹58.96 crores, was claimed as a business expenditure but viewed by the Income Tax Department as a distribution of profit and not permissible under Section 37 of the Income Tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Factory Ltd. case and that the income tax provisions do not treat every businessman or assessment year separately. The CIT(A) also noted that the cane price decided by the sugar cooperative did not involve passing on profits to the cane suppliers and that payments exceeding the government-fixed price could not be considered allowable business expenses under the Income Tax Act. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, as a cooperative society set up by farmers, their primary objective is not profit-making but providing remunerative prices to farmers. This contention was dismissed by the Assessing Officer, who asserted that the Income Tax Act does not provide differential treatment to cooperative societies in this context. * Case Laws and Precedents: The decision of the CIT(A) relied heavi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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