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CIT vs. Tasgaon Taluka S.S.K. Ltd (Supreme Court)

COURT:
CORAM: , ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: March 5, 2019 (Date of pronouncement)
DATE: March 9, 2019 (Date of publication)
AY: -
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CITATION:
S. 37(1)/40A(2) Business expenditure vs. sharing of profit: The AO has 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 determine what amount forms part of the profit. Whatever is the profit component is sharing of profit/distribution of profit and the rest is deductible as expenditure

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

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