Niphad Sahakari Sakhar Karkhana Ltd., Nashik V. Assistant Commissioner of Income-tax, Circle -1, Nashik

CO 35/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2218 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-03-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 08-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A Y HAS AL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / ITA NO.123/PUN/2010 / ASSESSMENT YEAR : 2002-03 ACIT, CIRCLE-1, NASHIK VS. NIPHAD SAH. SAKHAR KARKHANA LTD., BHAUSAHEB NAGAR, NIPHAD, DIST. NASHIK PAN : AAAAN0688A . / ITA NO.1638/PUN/2016 / ASSESSMENT YEAR : 2012-13 ACIT, CIRCLE-1, NASHIK VS. NIPHAD SAH. SAKHAR KARKHANA LTD., AT POST. BHAUSAHEB NAGAR, PIMPLAD, TALUKA NIPHAD, DIST. NASHIK 422 301 PAN : AAAAN0688A C.O. NO.35/PUN/2018 ARISING OUT OF ITA NO.1638/PUN/2016 / ASSESSMENT YEAR : 2012-13 NIPHAD SAH. SAKHAR KARKHANA LTD., AT POST. BHAUSAHEB NAGAR, PIMPLAD, TALUKA NIPHAD, DIST. NASHIK 422 301 PAN : AAAAN0688A VS. ACIT, CIRCLE-1, NASHIK NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 2 / ORDER PER R.S.SYAL, VP : THERE IS ONE APPEAL BY THE REVENUE FOR THE A.Y. 2002-0 3. ANOTHER APPEAL HAS BEEN FILED BY THE REVENUE FOR THE A.Y. 2012- 13. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION FOR THE S AID LATER YEAR. SINCE CERTAIN ISSUES INVOLVED IN THESE APPEALS ARE CO MMON, WE ARE, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. A.Y. 2002-03 : 2. THE FIRST ISSUE RAISED BY THE REVENUE IS AGAINST THE DELE TION OF DISALLOWANCE OF RS.1,66,31,744/- MADE BY THE ASSESSIN G OFFICER (AO) ON ACCOUNT OF EXCESS PRICE OF SUGARCANE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO-OPERATIVE SOCIETY MANUFACTURING WHITE SUGAR AND BY- PRODUCTS. THE AO MADE ADDITION OF RS. 1.66 CRORE AND O DD ON ACCOUNT OF EXCESS CANE PRICE PAID, WHICH CAME TO BE DELETE D IN THE FIRST APPEAL. ASSESSEE BY MRS. SHUBHADA KOPPA REVENUE BY SHRI PANKAJ GARG DATE OF HEARING 25-06-2019 DATE OF PRONOUNCEMENT 26-06-2019 NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 3 4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS AN AGREED POSITION BETWE EN THE RIVAL PARTIES THAT THE ISSUE OF PAYMENT OF EXCESSIVE PRICE ON PURCHASE OF SUGARCANE BY THE ASSESSES IS NO MORE RES INTEGRA IN VIEW OF THE RECENT JUDGMENT OF HONBLE SUPREME COURT IN CIT VS. TASGAON TALUKA S.S.K. LTD. (2019) 103 TAXMANN.COM 57 (SC) . THE HONBLE APEX COURT, VIDE ITS JUDGMENT DATED 05-03- 2019, HAS ELABORATELY DEALT WITH THIS ISSUE. IT RECORDED THE FACTUAL MATRIX THAT THE ASSESSEE IN THAT CASE PURCHASED AND CRUSHED SUGARCANE AND PAID PRICE FOR THE PURCHASE DUR ING CRUSHING SEASONS 1996-97 AND 1997-98, FIRSTLY, AT THE TIME OF PURCHASE OF SUGARCANE AND THEN, LATER, AS PER THE MANTR I 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 AUTHORIZE S 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 NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 4 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 O F PROFITS AND HENCE NOT DEDUCTIBLE AS EXPENDITURE. HE, THE REFORE, MADE AN ADDITION FOR SUCH SUM PAID TO MEMBERS AS WELL AS NON- MEMBERS. WHEN THE MATTER FINALLY CAME UP BEFORE THE HONB LE APEX COURT, IT NOTED THAT CLAUSE 5A WAS INSERTED IN THE YEAR 1 974 ON THE BASIS OF THE RECOMMENDATIONS MADE BY THE BHARGAVA COMMISSION, WHICH RECOMMENDED PAYMENT OF ADDITIONAL PRICE AT THE END OF THE SEASON ON 50:50 PROFIT SHARING BASIS BETW EEN THE GROWERS AND FACTORIES, TO BE WORKED OUT IN ACCORDANCE WITH THE SECOND SCHEDULE TO THE CONTROL ORDER, 1966. THEIR LORDSHIPS NOTED THAT AT THE TIME WHEN ADDITIONAL PURCHASE PRICE IS DETERMINED/FIXED UNDER CLAUSE 5A, THE ACCOUNTS ARE SETTLED AN D THE PARTICULARS ARE PROVIDED BY THE CONCERNED CO-OPERATIVE SOCIETY AS TO WHAT WILL BE THE EXPENDITURE AND WHAT WILL BE THE PROFIT ETC. CONSIDERING THE FACT THAT STATUTORY MINIMUM PRICE (SMP), DETERMINED UNDER CLAUSE 3 OF THE CONTROL ORDER, 196 6, WHICH IS PAID AT THE BEGINNING OF THE SEASON, IS DEDUCTIBLE IN THE ENTIRETY AND THE DIFFERENCE BETWEEN SMP DETERMINED UNDER NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 5 CLAUSE 3 AND SAP/ADDITIONAL PURCHASE PRICE DETERMINED UNDER CLAUSE 5A, HAS AN ELEMENT OF DISTRIBUTION OF PROFIT WHICH CAN NOT BE ALLOWED AS DEDUCTION, THE HONBLE 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 FIN AL PRICE/ADDITIONAL PURCHASE PRICE/SAP UNDER CLAUSE 5A OF THE CONTROL ORDER, 1966 AND THEREAFTER DETERMINE AS TO WHAT AMO UNT WOULD FORM PART OF THE DISTRIBUTION OF PROFIT AND THE OTHER A S DEDUCTIBLE EXPENDITURE. THE RELEVANT FINDINGS OF THE HONB LE APEX COURT ARE REPRODUCED AS UNDER:- 9.4. ..... THEREFORE, TO THE EXTENT OF THE COMPON ENT OF PROFIT WHICH WILL BE A PART OF THE FINAL DETERMINATION OF SAP AND/OR THE FINAL PRICE/ADDITIONAL PURCHASE PRICE FIXED UNDER C LAUSE 5A WOULD CERTAINLY BE AND/OR SAID TO BE AN APPROPRIATI ON OF PROFIT. HOWEVER, AT THE SAME TIME, THE ENTIRE/WHOLE AMOUNT OF DIFFERENCE BETWEEN THE SMP AND THE SAP PER SE CANNOT BE SAID T O BE AN APPROPRIATION OF PROFIT. AS OBSERVED HEREINABOVE, ONLY THAT PART/COMPONENT OF PROFIT, WHILE DETERMINING THE FIN AL PRICE WORKED OUT/SAP/ADDITIONAL PURCHASE PRICE WOULD BE A ND/OR CAN BE SAID TO BE AN APPROPRIATION OF PROFIT AND FOR TH AT AN EXERCISE IS TO BE DONE BY THE ASSESSING OFFICER BY CALLING UPON THE ASSESSEE TO PRODUCE THE STATEMENT OF ACCOUNTS, BALANCE SHEET AN D THE MATERIAL SUPPLIED TO THE STATE GOVERNMENT FOR THE P URPOSE OF DECIDING/FIXING THE FINAL PRICE/ADDITIONAL PURCHASE PRICE/SAP UNDER CLAUSE 5A OF THE CONTROL ORDER, 1966. MEREL Y BECAUSE THE HIGHER PRICE IS PAID TO BOTH, MEMBERS AND NON-M EMBERS, QUA THE MEMBERS, STILL THE QUESTION WOULD REMAIN WITH R ESPECT TO THE NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 6 DISTRIBUTION OF PROFIT/SHARING OF THE PROFIT. SO F AR AS THE NON- MEMBERS ARE CONCERNED, THE SAME CAN BE DEALT WITH A ND/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 T AKE INTO ACCOUNT THE MANNER IN WHICH THE BUSINESS WORKS, THE MODALIT IES AND MANNER IN WHICH SAP/ADDITIONAL PURCHASE PRICE/FINAL PRICE ARE DECIDED AND TO DETERMINE WHAT AMOUNT WOULD FORM PAR T OF THE PROFIT AND AFTER UNDERTAKING SUCH AN EXERCISE WHATE VER IS THE PROFIT COMPONENT IS TO BE CONSIDERED AS SHARING OF PROFIT/DISTRIBUTION OF PROFIT AND THE REST OF THE A MOUNT IS TO BE CONSIDERED AS DEDUCTIBLE AS EXPENDITURE. 5. BOTH THE SIDES ARE UNANIMOUSLY AGREEABLE THAT THE EXTANT ISSUE OF DEDUCTION FOR PAYMENT OF EXCESSIVE PRICE FOR PU RCHASE OF SUGARCANE IS SQUARELY COVERED BY THE AFORESAID JUDGMENT O F THE HONBLE SUPREME COURT. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET-ASIDE THE IMPUGNED ORDERS ON THIS SCORE AND REMIT THE MATTER TO THE FILE OF THE AO FOR DECIDING IT AFRESH AS PER LAW IN CONSONANCE WITH THE ARTICULATION OF LAW BY THE HONBLE SUPREME COURT IN THE AFORENOTED JUDGMENT. THE AO WOULD ALLOW DEDUCTION FOR THE PRICE PAID UNDER CLAUSE 3 OF THE SUGAR CA NE (CONTROL) ORDER, 1966 AND THEN DETERMINE THE COMPONENT OF DISTRIBUTION OF PROFIT EMBEDDED IN THE PRICE PAID UNDER CLAUSE 5A, BY CONSIDERING THE STATEMENT OF ACCOUNTS, BALANCE SHEET AND OTHER RELEVANT MATERIAL SUPPLIED TO THE STATE GOVERNMENT FOR THE PURPOSE OF DECIDING/FIXING THE FINAL PRICE/ADDITIONAL PURCHASE NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 7 PRICE/SAP UNDER THIS CLAUSE. THE AMOUNT RELATABLE TO THE PROFIT COMPONENT OR SHARING OF PROFIT/DISTRIBUTION OF PROFIT PAID BY TH E ASSESSEE, WHICH WOULD BE APPROPRIATION OF INCOME, WILL NOT B E 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 HONBLE SUPREME COURT SUPRA. NEEDLESS TO SAY, THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF HEARING BY THE AO IN SUC H FRESH DETERMINATION OF THE ISSUE. IT IS FURTHER MADE CLEAR THA T THE ASSESSEE WILL BE AT LIBERTY TO RAISE ANY OTHER ARGUMENT CONCER NING THE ISSUE BEFORE THE AO. 6. THE ONLY OTHER ISSUE WHICH ARISES IN THE APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.3,22,58,450/- MADE BY THE A O ON ACCOUNT OF UNDERSTATEMENT OF SALE. 7. THE FACTS APROPOS THIS GROUND ARE THAT THE ASSESSEE M ADE SALE OF CERTAIN QUANTITIES OF SUGAR TO M/S. JAI JAGDISH SUGAR NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 8 EXPORT/IMPORT, DHULE (JJSD) UNDER QUOTA AT THE RATE OF RS.1,080/- PER BAG. THE SUGAR WAS DELIVERED BY THE AS SESSEE TO JJSD, A MERCHANT, AGAINST THE RELEASE ORDER DATED 06-11-2 001 FROM THE DIRECTOR, KRISHI BHAWAN, NEW DELHI FOR EXPORT PURPOSES. THE AO OBSERVED THAT JJSD FAILED TO PRODUCE AN Y PROOF OF HAVING MADE SUCH EXPORTS. THE SUGAR PURCHA SED FROM THE ASSESSEE MEANT FOR EXPORT AT LOWER PRICE, WAS, IN FACT , SOLD BY JJSD IN THE LOCAL MARKET WITHOUT THE DEPARTMENTS PERMISSION. THE AO CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE DIFFERENCE BETWEEN THE MARKET PRICE AND THE QUOTA PRICE OF SUCH SUGAR SHOULD NOT BE TAXED IN ITS HANDS AS UNDERSTATEMENT OF SALES. THE ASSESSEE REPLIED THAT WHEN IT DEMANDED PROOF OF EXPO RT OF SUGAR FROM JJSD, THEY COULD NOT PRODUCE THE SAME AND THEY DEPOSITED THE EXCISE DUTY OF RS. 78,34,195/- FROM 21-0 3-2002 TO 13-06-2002 WITH THE ASSESSEE ALONG WITH INTEREST OF RS.8,07,544/- ON LATE PAYMENT OF EXCISE DUTY, WHICH WAS DULY DEPOSITED BY IT. THE ASSESSEE SUBMITTED THAT NO EXTRA INCO ME WAS EARNED BY THE ASSESSEE FROM JJSD WARRANTING ANY AD DITION. NOT CONVINCED, THE AO MADE AN ADDITION OF RS.3,22,58,450/ -, BEING, THE DIFFERENCE BETWEEN THE MARKET PRICE OF RS.1,430 /- PER BAG AND THE PRICE AT WHICH IT WAS SOLD TO JJSD AT RS.1,080/- PER NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 9 BAG. THE LD. CIT(A) DELETED THE ADDITION, AGAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE FACTS OF THIS GROUND ARE NOT DI SPUTED IN AS MUCH AS THE ASSESSEE ADMITTEDLY SOLD SUGAR TO JJSD AT A CONCESSIONAL RATE OF RS.1,080/- PER BAG ON THE UNDERSTA NDING THAT THE SAME WAS MEANT FOR EXPORT BY THE LATTER. JJSD DID NOT E XPORT THE SUGAR. RATHER, THEY SOLD THE SUGAR OBTAINED FROM THE A SSESSEE UNDER QUOTA IN THE DOMESTIC MARKET AT THE PREVAILING MARKET PRICES. THESE FACTS INDICATE THAT THE ASSESSEE DID NOT UND ERSTATE THE SALE PRICE. IT REFLECTED IN ITS ACCOUNTS THE CORRECT PRICE RECEIVED FROM JJSD. THE DEFAULT WAS COMMITTED BY JJSD IN NOT ACTUALLY EXPORTING THE SUGAR PURCHASED FROM THE ASSESSEE A T A REDUCED QUOTA PRICE, FOR WHICH IT FACED THE MUSIC. IN SO FAR AS THE ASSESSEE IS CONCERNED, THERE IS NOT ANY DEFAULT IN REFLE CTING THE SALES AT LOWER PRICE. IN FACT, THE ASSESSEE RECORDED THE SAME SALE PRICE OF THE SUGAR SOLD TO JJSD, AT WHICH IT WAS ACTUALLY S OLD. IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE ASSESSEE TOOK UP CIVIL PROCEEDINGS AGAINST JJSD AND SOME ARBITRATION AWARD WAS ALSO PASSED. THE LD. AR SUBMITTED THAT THE HONBLE BOMBAY HIGH COURT HAS CANCELLED THE AWARD DIRECTING THE PAYMENT OF SOME NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 10 COMPENSATION TO THE ASSESSEE. BE THAT AS IT MAY, IN OUR CONSIDERED OPINION, COMPENSATION, IF ANY, WHICH THE ASSESS EE EVENTUALLY RECEIVES FROM JJSD WILL BE SUBJECTED TO TAX IN ITS HAN D WHEN IT ACQUIRES THE RIGHT TO RECEIVE THE SAME. IN SOFARAS THE YEAR UNDER CONSIDERATION IS CONCERNED, THE ASSESSEE HAS NEITHER RECOVERED EXCESS OVER QUOTA PRICE FROM JJSD NOR ACQUIRE D RIGHT TO RECEIVE ANY COMPENSATION. WE, THEREFORE, HOLD THAT THE LD . CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. 9. IN THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. A.Y. 2012-13 : 10. THE ONLY GRIEVANCE PROJECTED BY THE REVENUE IN ITS APPE AL IS AGAINST ENTITLING THE ASSESSEE TO DEDUCTION ON ACCOUNT OF EXPENDITURE CLAIMED ON SALARIES AND WAGES AMOUNTING TO RS.2,72,51,072/-. 11. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSES SEE RAISED AN ADDITIONAL GROUND BEFORE THE LD. CIT(A) THAT IT INCU RRED LIABILITY FOR SALARY ARREARS AMOUNTING TO RS.2,72,51,072/- AS PER THE REGISTERED AGREEMENT DATED 23-11-2011 WHICH WAS OMITTED TO BE DEBITED TO THE PROFIT AND LOSS ACCOUNT OR CLAIMED AS DED UCTION. THE ASSESSEE CLAIMED THAT DEDUCTION SHOULD BE ALLOWED FOR S UCH NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 11 AN AMOUNT. THE LD. CIT(A) NOTED IN PARA NO.8.2 OF THE IM PUGNED ORDER THAT: THERE IS NO MENTION ABOUT SALARY ARREARS BY THE AO IN THE ASSESSMENT ORDER. HOWEVER, THE APPELLANT IS ENTITLED F OR EXPENDITURE CLAIMED ON SALARY AND WAGES. THE AO IS DIRE CTED TO VERIFY THE SAME AND ALLOW RELIEF. THE REVENUE IS AGGRIEVE D BY IT. 12. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEV ANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE LD. CIT(A) HAS N OT GRANTED ANY RELIEF IN RESPECT OF THE EXPENDITURE OF RS. 2. 72 CRORE. HE SIMPLY DIRECTED THE AO TO VERIFY THE ASSESSEES CLAIM A ND THEN ALLOW RELIEF. IN OTHER WORDS, IF ON VERIFICATION, THE A O FINDS THAT THE RELIEF IS NOT DUE, HE WILL DENY THE SAME AND VICE VERSA . THE MERE FACT OF RESTORING THE MATTER TO THE FILE OF AO, IN O UR CONSIDERED OPINION, DOES NOT CONSTITUTE ANY CAUSE OF GRIEV ANCE TO THE REVENUE IN ASMUCH AS THE BALL HAS AGAIN COME BACK TO TH E COURT OF THE AO, WHO CAN DECIDE THE ISSUE AS PER LAW. W E ARE, THEREFORE, NOT INCLINED TO DISTURB THE IMPUGNED ORDER ON THI S SCORE. NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 12 13. THE FIRST ISSUE RAISED IN THE ASSESSEES CROSS OBJECTIO N IS AGAINST THE CONFIRMATION OF ADDITION ON ACCOUNT OF EXCESS PRIC E PAID ON PURCHASE OF SUGARCANE AMOUNTING TO RS.13,55,67, 049/-. 14. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT SIMILAR ISS UE WAS RAISED BY THE REVENUE IN ITS APPEAL FOR THE A.Y. 2002-03, WHICH WE HAVE DEALT WITH HEREINABOVE GIVING CERTAIN DIRECTIONS TO THE AO. THE IMPUGNED ORDER IS SET-ASIDE TO THIS EXTENT AND THE MATTER IS SENT BACK TO THE AO FOR DECIDING THIS ISSUE AFRES H AS PER LAW IN ACCORDANCE WITH OUR OBSERVATIONS RECORDED ABOVE. 15. THE SECOND ISSUE RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION IS AGAINST THE CONFIRMATION OF ADDITION TOWARDS SALE OF SUGAR AT CONCESSIONAL RATE. 16. THIS ISSUE HAS ALSO COME UP BEFORE THE PUNE BENCH ES OF THE TRIBUNAL IN SEVERAL CASES. THE PUNE BENCH HAS RESTORED IT TO THE FILE OF THE AO FOR FRESH ADJUDICATION GIVING CERTAIN DIRECTIONS. RELEVANT FINDING OF THE TRIBUNAL IN THE CASE OF MAJALGAON SAHAKARI SAKHAR KARKHANA LTD. VS. ACIT AND OTHERS IN ITA NO.308/PUN/2018, ORDER DATED 14-03-2019 READS AS UNDER : NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 13 11. HAVING HEARD BOTH THE SIDES AND GONE THROU GH THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE AO MADE ADDITION OF THE DIFFERENCE BETWEEN THE MARKET PRICE AND THE CONCESS IONAL PRICE AT WHICH SUGAR (FINAL PRODUCT) WAS GIVEN TO FARMERS AN D CANE GROWERS. IN THIS REGARD, IT IS OBSERVED THAT THIS ISSUE HAS BEEN CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KRISHNA SAHAKARI SAKHAR KARKHANA LIMITED (2012) 27 TAXMANN.COM 162 (SC). VIDE JUDGMENT DATED 25-09-20 12, THE HONBLE SUPREME COURT NOTICED THAT THE DIFFERENCE B ETWEEN THE AVERAGE PRICE OF SUGAR SOLD IN THE MARKET AND THE P RICE OF SUGAR SOLD BY THE ASSESSEE TO ITS MEMBERS AT CONCESSIONAL RATE WAS TAXED BY THE DEPARTMENT UNDER THE HEAD APPROPRIATION OF PROFIT. THE HONBLE SUMMIT COURT REMITTED THE MATTER TO THE CIT (A) FOR CONSIDERING, INTER ALIA,: WHETHER THE ABOVEMENTION ED PRACTICE OF SELLING SUGAR AT CONCESSIONAL RATE HAS BECOME THE P RACTICE OR CUSTOM IN THE CO-OPERATIVE SUGAR INDUSTRY?; AND WHE THER 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 U NDER CONSIDERATION CAN BE DECIDED BY AN APPROPRIATE LOWE R AUTHORITY ONLY ON THE TOUCHSTONE OF THE RELEVANT FACTORS NOTE D IN THE ABOVE JUDGMENT. IN OUR CONSIDERED OPINION, IT WOULD BE JU ST 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 CIT S(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 HONBLE SUPREME COURT I N THE CASE OF KRISHNA SAHAKARI SAKHAR KARKHANA LIMITED (SUPRA). R ESTORATION TO THE AO IS NECESSITATED BECAUSE, FOLLOWING THE JUDGM ENT OF THE HONBLE APEX COURT IN THE CASE OF TASGAON TALUKA S. S.K. LTD. (SUPRA), WE HAVE REMITTED THE ISSUE OF PAYMENT OF E XCESSIVE PRICE TO THE FILE OF AO, AND AS SUCH, THE INSTANT ISSUE CANN OT BE SENT TO LD. CIT(A) AS IT WOULD AMOUNT TO SIMULTANEOUSLY SENDING ONE PART OF THE SAME ASSESSMENT ORDER TO THE AO AND OTHER TO TH E CIT(A), WHICH IS NOT APPROPRIATE. WE ORDER ACCORDINGLY. 17. FOLLOWING THE ABOVE PRECEDENT, WE SET-ASIDE THE IMPUGNE D ORDER TO THIS EXTENT AND REMIT THE MATTER TO THE FILE OF AO FOR ITS FRESH DETERMINATION IN ACCORDANCE WITH LAW. NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 14 18. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED AND TH E CROSS OBJECTION OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE, 2019. SD/- SD/- (VIKAS AWASTHY) (R.S.SYAL ) / JUDICIAL MEMBER / VICE PRESIDENT PUNE; DATED : 26 TH JUNE, 2019 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. & ( ) / THE CIT (APPEALS)-I, NASHIK 4. 5. THE CIT-I, NASHIK ) , , / DR B, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE NIPHAD SAH. SAKHAR KARKHANA LTD., A.YRS. 2002-03 & 2012-13 15 DATE 1. DRAFT DICTATED ON 25-06-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 25-06-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *