{"id":4388,"date":"2019-03-12T12:54:09","date_gmt":"2019-03-12T12:54:09","guid":{"rendered":"http:\/\/itatonline.org\/digest\/cit-v-tasgaon-taluka-s-s-k-ltd-2019103-taxmann-com-57-sc-www-itatonline-org\/"},"modified":"2024-09-10T11:45:57","modified_gmt":"2024-09-10T06:15:57","slug":"cit-v-tasgaon-taluka-s-s-k-ltd-2019103-taxmann-com-57-sc-www-itatonline-org","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/cit-v-tasgaon-taluka-s-s-k-ltd-2019103-taxmann-com-57-sc-www-itatonline-org\/","title":{"rendered":"CIT v. Tasgaon Taluka Sahakari Sakhar Karkhana Ltd ( 2019)103 taxmann.com 57 \/ 262 Taxman 176\/ 412 ITR 420 \/ 307 CTR 473\/ 175 DTR 345(SC), www.itatonline.org\/Editorial :Review petition is dismissed ,Sharad Sahakari Sakhar Karkhana Ltd. v. CIT (2024) 298 Taxman 191 (SC)"},"content":{"rendered":"

AO\u00a0 held that \u00a0the 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 (and consequently paid by the assessee to the cane growers) can be said to be a distribution of profit, as in the price determination under Clause 5A of the Control Order, 1966, there is an element of profit and therefore the price paid to the cane growers determined by the State Government is excessive and therefore it is not deductible as expenditure, and is required to be included in the income of the assessee. AO also held that cane price paid to the cane growers over the SMP is disallowable as per Section 40A(2)(a) of the Act by observing that purchase price paid is excessive and unreasonable. On appeal CIT(A)\u00a0 allowed the appeal following SB\u00a0 in \u00a0Dy.CIT v. Manjara Shetkari Sakhar Karkhana \u00a0Ltd ( 2004) 91 ITD 361 (SB) (Mum) (Trib)( dt.19.08.2004) Order of CIT(A)\u00a0 was affirmed by Tribunal . \u00a0High Court dismissed the appeal of the revenue following the decision in CIT v Manjara Shetkari Sahakari Sakar Karkhana Ltd ( 2008) 301 ITR 191 ( Bom) (HC) .On appeal \u00a0by the revenue the Supreme Court considering the decision in Maharashtra Rajya Sahkari Sakkar Karkhana Sangh Ltd v State of Maharashtra (1995)\u00a0 Supp.( 3) SCC 475 the Court held that 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 . Question of law is answered partly in favour of the revenue and partly in favour of the assessee. Matter is remitted to the AO to <\/strong>undertake the exercise as stated in the judgement\u00a0after giving an opportunity to the respective assesses.<\/b>( CA.No \u00a08890 of 2012, dt. 05.03.2019)( AY. 1998-99)<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

S.37(1): Business expenditure – Diversion by overriding title -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 \u2013question of law is answered partly in favour of the revenue and partly in favour of the assessee- Matter is remitted to the AO to undertake the exercise as stated in the judgement after giving an opportunity to the respective assesses. [ S.40A(2),Sugarcane ( Control) Order 1966 clauses , 3, 5A ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4388","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-18M","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/4388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=4388"}],"version-history":[{"count":5,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/4388\/revisions"}],"predecessor-version":[{"id":46213,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/4388\/revisions\/46213"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=4388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=4388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=4388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}