DCIT, Circle-2, Sangli V. Vasantdada Shetkari Sah. Sakhar Karkhana Ltd., Sangli

ITA 2130/PUN/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8426 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-04-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 30-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE JUSTICE P.P. BHATT, PRESIDENT AND SHRI R.S. SYAL, VICE PRESIDENT SL. NO. ITA NO./CO.NO. NAME OF APPELLANT NAME OF RESPONDENT ASST. YEAR 1-3 2126/PUN/2012 2127/PUN/2012 2128/PUN/2012 ACIT, CIRCLE-2, SANGLI SONHIRA SAH. SAKHAR KARKHANA LTD., A/P. WANGI, TAL. KADEGAON, DIST. SANGLI PAN : AAAAM1794J 2007-08 2008-09 2009-10 4-6 2129/PUN/2012 2130/PUN/2012 2351/PUN/2012 ACIT, CIRCLE-2, SANGLI VASANTDADA SHETKARI SAHAKARI SAKHAR KARKHANA LTD., A/P. MADHAVNAGAR ROAD, SANGLI PAN : AAAAV0137C 2007-08 2008-09 2009-10 7-8 948/PUN/2012 949/PUN/2012 ACIT, CIRCLE-10, PUNE SHREE VIGHNAHAR SAHAKARI SAKHAR KARKHANA LTD., NIVRUTINAGAR, TAL. JUNNER, DIST. PUNE PAN : AAAAS2033G 2007-08 2008-09 9 661/PUN/2016 SAGAR SAHAKARI SAKHAR KARKHANA LTD., (SINCE AMALGAMATED WITH SAMARTH SSK LTD.) ANKUSNAGAR, TAL. AMBAD, DIST. JALNA PAN : AAAAS7250F ACIT, JALNA CIRCLE, JALNA 2011-12 10-11 491/PUN/2014 492/PUN/2014 DCIT, CIRCLE-3, NANDED SHIVSHAKTI SHETKARI SAHKARI SAKHAR KARKHANA LTD., AT & POST. TANDULWADI, TQ. WASHI, DIST. OSMANABAD PAN : AAAAS5851Q 2007-08 2009-10 SSK GROUP 2 12-13 2370/PUN/2012 2371/PUN/2012 DCIT, CIRCLE-1, KOLHAPUR APPASAHEB NALAWADE GADHINGALAJ TALUKAR SAHAKARI SAKHAR KARKHANA LTD., A/P. HARALI, MANGAON ROAD, TAL. GADHINGALAJ,DIST. KOLHAPUR PAN : AAAAG0574A 2007-08 2008-09 14-16 485/PUN/2014 486/PUN/2014 487/PUN/2014 DCIT, CIRCLE-3, NANDED BHAURAO CHAVAN SAHKARI SAKHAR KARKHANA LTD., LAXMINAGAR, DEGAON YELEGAON, TQ. ARDHAPUR, DIST. NANDED PAN : AAAAB0959Q 2001-02 2002-03 2006-07 17-18 595/PUN/2012 596/PUN/2012 ACIT, CIRCLE-3(1), DHULE SHIRPUR SHETKARI SAHAKARI SAKHAR KARKHANA LTD., A/P. SHIVAJI NAGAR, DAHIWAD, TAL. SHIRPUR, DIST. DHULE PAN : 4014-PX-7484 1996-97 1997-98 19 2162/PUN/2012 DCIT, ICHALKARANJI CIRCLE, ICHALKARANJI DATTA SHETKARI SAHAKARI SAKHAR KARKHANA LTD., GAT NO.230-231, A/P. DATTANAGAR, SHIROL, KOLHAPUR PAN : AAAAS0597B 2009-10 20-21 1028/PUN/2012 1029/PUN/2012 SHREE SHANKAR SSK LTD., SADASHIVNAGAR, TAL. MASHIRAS, DIST. SOLAPUR 413111 PAN :AAAAS3735M ACIT, CIRCLE-1, SOLAPUR 2007-08 2008-09 ASSESSEE (S) REPRESENTED BY : SHRI PRASANNA L. JOS HI SHRI M.K. KULKARNI SHRI PRAMOD SHINGTE SMT. DEEPA KHARE NONE APPEARED : SL.NOS. 1 TO 3, 4, TO 6, 10, 11 & 19 REVENUE BY : SHRI PANKAG GARG SSK GROUP 3 / ORDER PER P.P. BHATT, PRESIDENT THIS BATCH COMPRISING OF CERTAIN APPEALS BY THE ASSESSEE S AND THE OTHERS BY THE REVENUE RELATE TO DIFFERENT ASSESSMENT YEA RS CAPTIONED ABOVE. SINCE MOST OF THE APPEALS HAVE AT LEAST ON E COMMON ISSUE, WE ARE, THEREFORE, DISPOSING THEM OFF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. I. EXCESSIVE SUGARCANE PRICE PAID 2. A COMMON ISSUE INVOLVED IN ALMOST ALL THE APPEALS IS ON ACCOUNT OF THE ADDITION MADE BY THE ASSESSING OFFICER (AO) TOWARDS OF EXCESSIVE SUGARCANE PRICE PAID TO MEMBERS A S WELL AS NON-MEMBERS OF THE RESPECTIVE ASSESSEES. ON A REPRES ENTATIVE BASIS, WE ARE ESPOUSING THE FACTS IN THE CASE OF ACIT, CIRCLE-2, SANGLI VS. SONHIRA SAHAKARI SAKHAR KARKHANA LTD. ITA NO.2126/PUN/2012 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF SUGAR AND ITS BYE-PRODUCTS. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT TH E ASSESSEE PAID EXCESSIVE CANE PRICE, OVER AND ABOVE THE FAIR AND DATE OF HEARING : 12-04-2019 DATE OF PRONOUNCEMENT : 12-04-2019 SSK GROUP 4 REMUNERATIVE PRICE (FRP) FIXED BY THE GOVERNMENT, TO ITS MEM BERS AS WELL AS NON-MEMBERS. ON BEING CALLED UPON TO JUSTIFY SUC H DEDUCTION, THE ASSESSEE GAVE CERTAIN EXPLANATION BY SUBMITTING THAT SUCH PAYMENT WAS SOLELY AND EXCLUSIVELY IN CONNECTION WITH THE BUSINESS AND THE ENTIRE AMOUNT WAS DEDUCTIBLE U/S.37(1) OF TH E INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). RELYING ON CLAUSE-3 AND ADDITIONAL PRICE PAYABLE AS PER CLAUSE 5A O F THE SUGARCANE CONTROL ORDER, 1966, THE AO OPINED THAT THE EXCE SSIVE PRICE PAID WAS IN THE NATURE OF `DISTRIBUTION OF PROFITS AND HENCE NOT DEDUCTIBLE. THIS IS HOW, HE COMPUTED THE EXCESSIVE CANE PRICE PAID BOTH TO THE MEMBERS AND NON-MEMBERS AT RS.5,29,14, 209.50 AND MADE ADDITION FOR THE SAID SUM. THE LD. CIT(A) DELETED THE ADDITION ON THIS POINT. 3. FACTS IN ALL OTHER CASES QUA THIS ISSUE, IN SO FAR AS THE ASSESSMENT PROCEEDINGS ARE CONCERNED, ARE MUTATIS MUTANDIS SIMILAR. IT IS SEEN THAT IN SOME CASES, THE ADDITION GOT DELETED BY THE LD. CIT(A), WHILST IN OTHERS THE ADDITION GOT SUSTAINED. T HIS LED TO FILING OF THE APPEALS BOTH BY THE ASSESSEE AS WELL AS TH E REVENUE BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELE VANT MATERIAL ON RECORD. THERE IS CONSENSUS AD IDEM BETWEEN THE RIVAL SSK GROUP 5 PARTIES THAT THE ISSUE OF PAYMENT OF EXCESSIVE PRICE ON PU RCHASE 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 ELABOR ATELY 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 DURING CRUSHING SEASONS 1996-97 AND 1997- 98, 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 A CT, 1955 AND THE GOVERNMENT ISSUED SUGAR CANE (CONTROL) ORDER , 1966, WHICH DEALS WITH ALL ASPECTS OF PRODUCTION OF SUGARCAN E AND SALES THEREOF INCLUDING THE PRICE TO BE PAID TO THE CANE GRO WERS. CLAUSE 3 OF THE SUGAR CANE (CONTROL) ORDER, 1966 AUTHOR IZES THE GOVERNMENT TO FIX MINIMUM SUGARCANE PRICE. IN ADDITION, TH E ADDITIONAL SUGARCANE PRICE IS ALSO PAYABLE AS PER CLAUSE 5A OF THE CONTROL ORDER, 1966. THE AO IN THAT CASE CONCLUDED THAT TH E DIFFERENCE BETWEEN THE PRICE PAID AS PER CLAUSE 3 OF THE C ONTROL 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 SSK GROUP 6 AND HENCE NOT DEDUCTIBLE AS EXPENDITURE. HE, THEREFORE, MADE AN ADDITION FOR SUCH SUM PAID TO MEMBERS AS WELL AS NON-MEMB ERS. WHEN THE MATTER FINALLY CAME UP BEFORE THE HONBLE APEX COU RT, IT NOTED THAT CLAUSE 5A WAS INSERTED IN THE YEAR 1974 ON THE B ASIS OF THE RECOMMENDATIONS MADE BY THE BHARGAVA COMMISSION, WHIC H RECOMMENDED PAYMENT OF ADDITIONAL PRICE AT THE END OF THE SEASON ON 50:50 PROFIT SHARING BASIS BETWEEN THE GROWERS AND FACT ORIES, 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 AND THE PARTICULARS ARE PROVIDED BY THE CONCERNED CO-OPERATIVE SOCIETY AS TO WHAT WILL BE THE EXPENDITU RE AND WHAT WILL BE THE PROFIT ETC. CONSIDERING THE FACT THAT STATUTORY MINIMUM PRICE (SMP), DETERMINED UNDER CLAUSE 3 OF THE CONTR OL ORDER, 1966, WHICH IS PAID AT THE BEGINNING OF THE SEASON, IS DEDUCTIBLE IN THE ENTIRETY AND THE DIFFERENCE BETWEEN SMP DETERMINED UNDER CLAUSE 3 AND SAP/ADDITIONAL PURCHASE PRICE DETERMINED UNDER CLAUSE 5A, HAS AN ELEMENT OF DISTRIBUTION OF PROFIT WHICH CANNOT BE ALLOWED AS DEDUCTION, THE HONBLE SUPRE ME 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 SSK GROUP 7 EXERCISE OF CONSIDERING ACCOUNTS/BALANCE SHEET AND THE MATER IAL 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 AND THEREAFTER DETERM INE AS TO WHAT AMOUNT WOULD FORM PART OF THE DISTRIBUTION OF PROFIT AND THE OTHER AS DEDUCTIBLE EXPENDITURE. THE RELEVANT FINDINGS OF THE HONBLE 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 AN D/OR THE FINAL PRICE/ADDITIONAL PURCHASE PRICE FIXED UNDER CLAUSE 5A WOULD CERTAINLY BE AND/OR SAID TO BE AN APPROPRIATION OF PROFIT. HOWEVER, AT THE SAME TIME, THE ENTIRE/WHOLE AMOUNT OF DIFFER ENCE BETWEEN THE SMP AND THE SAP PER SE CANNOT BE SAID TO BE AN APPR OPRIATION OF PROFIT. AS OBSERVED HEREINABOVE, ONLY THAT PART/COMPONENT OF PROFIT, WHILE DETERMINING THE FINAL PRICE WORKED OUT/SAP/AD DITIONAL PURCHASE PRICE WOULD BE AND/OR CAN BE SAID TO BE AN APPROPRIATION OF PROFIT AND FOR THAT AN EXERCISE IS TO BE DONE BY THE ASSESSING OFFICER BY CALLING UPON THE ASSESSEE TO PRODUCE THE STATEME NT OF ACCOUNTS, BALANCE SHEET AND THE MATERIAL SUPPLIED TO THE STAT E GOVERNMENT FOR THE PURPOSE OF DECIDING/FIXING THE FINAL PRICE/ADDI TIONAL PURCHASE PRICE/SAP UNDER CLAUSE 5A OF THE CONTROL ORDER, 19 66. MERELY BECAUSE THE HIGHER PRICE IS PAID TO BOTH, MEMBERS A ND NON- MEMBERS, QUA THE MEMBERS, STILL THE QUESTION WOULD REMAIN WITH RESPECT TO THE DISTRIBUTION OF PROFIT/SHARING OF TH E PROFIT. SO FAR AS THE NON-MEMBERS ARE CONCERNED, THE SAME CAN BE DEAL T 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 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 PART OF THE PRO FIT 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. SSK GROUP 8 5. BOTH THE SIDES ARE UNANIMOUSLY AGREEABLE THAT THE EXTA NT ISSUE OF DEDUCTION FOR PAYMENT OF EXCESSIVE PRICE FOR PURCHASE OF SUGARCANE, RAISED IN MOST OF THE APPEALS UNDER CONSIDERA TION, IS SQUARELY COVERED BY THE AFORESAID JUDGMENT OF THE HONBLE SUPREME COURT. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET - ASIDE THE IMPUGNED ORDERS ON THIS SCORE AND REMIT THE MATTE R TO THE FILE OF THE RESPECTIVE A.OS. 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 DEDUC TION FOR THE PRICE PAID UNDER CLAUSE 3 OF THE SUGAR CANE (CONTR OL) ORDER, 1966 AND THEN DETERMINE THE COMPONENT OF DISTRIBUTION OF PROFIT EMBEDDED IN THE PRICE PAID UNDER CLAUSE 5A, BY CONS IDERING 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 PRICE/SAP UNDER THIS CLAUSE. THE AMOUNT RELATABLE TO THE PROFIT COMPONENT OR SHARING OF PROFIT/DISTRIBUTION OF PROFIT PAID BY THE ASSESSEE, WHICH WOULD BE APPROPRIATION OF INCOME, WILL NOT BE ALLOWED AS DEDUCTION, WHILE THE REMAINING AMOUNT, BEING A CHARGE AGAINS T THE INCOME, WILL BE CONSIDERED AS DEDUCTIBLE EXPENDITURE. 6. AT THIS STAGE, IT IS MADE CLEAR THAT THE DISTRIBUTION OF PR OFITS CAN ONLY BE QUA THE PAYMENTS MADE TO THE MEMBERS. IN SO FAR AS THE SSK GROUP 9 NON-MEMBERS ARE CONCERNED, THE CASE WILL BE CONSIDERED A FRESH BY THE AO BY APPLYING THE PROVISIONS OF SECTION 40A(2) OF THE A CT, 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 SUCH FRESH DETERMINATION OF THE ISSUE. II. ADDITION FOR SUGAR GIVEN TO MEMBERS AT CONCESSIONAL RATES [APPEALS IN WHICH KRISHNA SAHAKARI SAKHAR KARKHANA LIMITED (SC) NOT CONSIDERED BY LOWER AUTHORITIES ] 7. IN SOME OF THE APPEALS, THERE IS ANOTHER ISSUE OF G IVING SUGAR TO MEMBERS AT CONCESSIONAL RATES. SUCH GROUND IS AGAINST THE DISALLOWANCE ON ACCOUNT OF PRICE DIFFERENCE ON CERTAIN QUAN TITY OF SUGAR GIVEN TO THE MEMBERS AT CONCESSIONAL RATE. 8. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE AO MADE ADDITION O F THE DIFFERENCE BETWEEN THE MARKET PRICE AND THE CONCESSIONAL P RICE AT WHICH SUGAR (FINAL PRODUCT) WAS GIVEN TO FARMERS AND CAN E GROWERS. IN THIS REGARD, IT IS OBSERVED THAT THIS ISSUE HAS BEEN CONSID ERED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KRISHNA SAHAKARI SAKHAR KARKHANA LIMITED (2012) 27 TAXMANN.COM 16 2 (SC). VIDE JUDGMENT DATED 25-09-2012, THE HONBLE SUPREM E SSK GROUP 10 COURT NOTICED THAT THE DIFFERENCE BETWEEN THE AVERAGE PRICE O F SUGAR SOLD IN THE MARKET AND THE PRICE OF SUGAR SOLD BY THE ASSESSEE TO ITS MEMBERS AT CONCESSIONAL RATE WAS TAXED BY THE DEPARTM ENT UNDER THE HEAD APPROPRIATION OF PROFIT. THE HONBLE SUMM IT COURT REMITTED THE MATTER TO THE CIT(A) FOR CONSIDERING, INTER ALIA ,: WHETHER THE ABOVEMENTIONED PRACTICE OF SELLING SUGAR AT CONCESSIONAL RATE HAS BECOME THE PRACTICE OR CUSTOM IN THE C O- OPERATIVE SUGAR INDUSTRY?; AND WHETHER 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/CAN E GROWERS/MEMBERS EACH YEAR ON MONTH-TO-MONTH BASIS, APA RT FROM OTHERS FROM DIWALI? THE ISSUE UNDER CONSIDERATION CAN BE DECIDED BY AN APPROPRIATE LOWER AUTHORITY ONLY ON THE TOUCHS TONE OF THE RELEVANT FACTORS NOTED IN THE ABOVE JUDGMENT. IN OUR CONSIDERED OPINION, IT WOULD BE JUST 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 CITS(A), FOR FRESH CONSIDERATION A S 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 GIVE N BY THE HONBLE SUPREME COURT IN THE CASE OF KRISHNA SAHAKARI SSK GROUP 11 SAKHAR KARKHANA LIMITED (SUPRA) . RESTORATION TO THE AO IS NECESSITATED BECAUSE, FOLLOWING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF TASGAON TALUKA S.S.K. LTD. (SUPRA) , WE HAVE REMITTED THE ISSUE OF PAYMENT OF EXCESSIVE PRICE TO THE FILE O F AO, AND AS SUCH, THE INSTANT ISSUE CANNOT 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 THE CIT(A), WHICH IS NOT APPROPRIATE. WE ORDER ACCORDINGLY. III. DISALLOWANCE OF EXPENSES 9. ANOTHER ISSUE IN THE APPEAL OF THE REVENUE IN SHIVSHAK TI SSK LTD. VS. DCIT, CIRCLE-3 ITA NO.492/PUN/2014 IS AGAIN ST THE REDUCTION IN THE ADDITION OF RS.50,67,830/- ON ACCOUNT OF EXPENSES VIZ. PURCHASES, POWER & FUEL, REPAIRS TO MACHIN ERY, HOSPITALITY ADVERTISEMENT, TRAVELLING EXPENSES, TELEPHONE EXPENSES ETC. TO RS.5.00 LAKH BY THE LD. CIT(A). THE AO , ON ESTIMATION BASIS, MADE CERTAIN ADDITIONS FROM VARIOUS EXPENS ES AT SOME PERCENTAGE FOR NON-AVAILABILITY OF EVIDENCES/NON-VERIFIA BILITY OF DETAILS. THE LD. CIT(A) RESTRICTED SUCH ADDITION TO RS.5 LA KH AND GAVE PARTIAL RELIEF. THE REVENUE IS AGGRIEVED BY REDUCTION IN THE ADDITION. SSK GROUP 12 10. WE FIND THE LD. CIT(A) HAS CATEGORICALLY MENTIONED THA T THE ASSESSEE IS GOVERNED BY THE PROVISIONS OF COOPERATIVE SOC IETIES ACT AND UNDER THE CONTROL AND SUPERVISION OF VARIOUS GOV T. AUTHORITIES. THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUN TS AND THE SAME ARE SUBJECTED TO AUDIT. HE FURTHER NOTED THAT THE AO FAILED TO VERIFY THE BOOKS OF ACCOUNT AND MADE ADDITION. UNDER THE SE CIRCUMSTANCES AND CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED OPINIO N THAT THE LD. CIT(A) HAS TAKEN A REASONABLE VIEW. THUS, WE COUNTE NANCE THE VIEW TAKEN BY THE LD. CIT(A) ON THIS SCORE. 11. IN THE RESULT, ALL THE APPEALS ARE FULLY/PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH APRIL, 2019. SD/- SD/- (R.S.SYAL) (P.P.BHATT) VICE PRESIDENT PRESIDENT PUNE; DATED : 12 TH APRIL, 2019 SSK GROUP 13 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A) CONCERNED 4. 5. 6. THE CIT CONCERNED , , / DR B, ITAT, PUNE; / GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 12-04-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 12-04-2019 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. *