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Income Tax Appellate Tribunal, G BENCH, MUMBAI
order : 31.01.2023 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant has challenged the order, dated 24.02.2011, passed by the Ld. Commissioner of Income Tax (Appeals)-4, Mumbai [hereinafter referred to as „the CIT(A)‟] for the Assessment Year 2005-06 whereby the Ld. CIT(A) had partly allowed the appeal against the Assessment Order, dated 31.12.2007, passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).
The Appellant has raised the following grounds of appeal:
1. The learned Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer restricting the Assessment Year: 2005-06 depreciation to Rs.15,56,86,466/- as against Rs.23,00,60,816/- as claimed by your appellants.. (i) The learned Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer of reducing the gross block of the plant and machinery by the amount received/receivable as subsidies from USAID & KREDL amounting to Rs.82,30,386/- and Rs.2,25,00,000/- respectively. Your appellants submit that the gross block/WDV ought not to have been reduced by these subsidies received and the depreciation ought to have been allowed without reducing the subsidy amounts. (ii) Further your appellants submit that the depreciation ought to have been granted by taking the correct amount of opening WDV brought forwarded from the earlier years calculated after giving effect to the appeal orders for earlier years. 2) The learned Commissioner of income-tax (Appeals) erred in confirming the addition of Rs.57,14,000/- being amount written off on account of impairment of assets. Your appellants submit that the said amount ought to have been allowed. 3) The learned Commissioner of Income-tax (Appeals) erred in confirming the disallowance of prior period expenses amounting to Rs.16,48,654/-. Your appellants submit that these represent the income of earlier years accounted and taxed in earlier years which are now written off as the same could not be realized. Your appellants therefore submit that the same ought to have been allowed as claimed. 4) Your appellants further reserve the rights to add, amend or alter the aforesaid grounds of appeal as they may think fit by themselves or by their representative.”
3. The Appellant has also raised the following additional grounds of appeal vide letter dated 09.01.2015:
“5.1 The Learned Commissioner of Income-tax (Appeals)-4, Mumbai [“Ld. CIT(A)] erred in not allowing the claim of deduction of Rs. 1,28,61,041/-, being additional sugarcane price pertaining to A.Y. 2002-03. 5.2 It is submitted that in the facts and the circumstances of Assessment Year: 2005-06 the case, and in law, the said disallowance based on erroneous presumption on fact this claim was allowed in A.Y. 2006-07. 5.3 It is submitted that in the facts and the circumstances of the case, and in law, no such disallowance was called for.”
Brief facts of the case are that the Appellant, a Company engaged in the business of manufacturing of sugar, organic chemicals and co-generation of power, filed its return of income on 31.10.2005 declaring „Nil‟ income under normal provisions of the Act while declaring Book Profits under Section 115JB of the Act at INR 4,53,34,699/-. The Appellant filed revised return of income on 16.12.2006 declaring income of INR 1,70,40,670/- after including claim for additional sugarcane price of INR 1,28,61,041/- for the Season 2001-02 and declare „Nil‟ taxable income after adjustment of brought forward unabsorbed depreciation. The Book Profits under Section 115JB of the Act remained same at INR 4,53,34,699/-.
The case of the Appellant was selected for scrutiny. The Assessing Officer completed assessment under Section 143(3) of the Act vide order dated 31.12.2007, assessing total income of INR 22,16,98,800/- after making a number of additions/disallowances. The appeal preferred by the Appellant before the CIT(A) against the Assessment Order was disposed off vide order dated 24.02.2011. The CIT(A) partly allowed the appeal. Not being satisfied with the relief granted by the CIT(A), the Appellant has preferred the present appeal on the grounds reproduced in paragraph 2 above which are taken up in seriatim hereinafter.
Ground No. 1 raised by the Appellant pertains to claim of Assessment Year: 2005-06 depreciation in respect of plant and machinery. The Assessing Officer restricted the claim of depreciation amounting to INR 23,00,60,816/- to INR 15,56,86,466/-. For setting up a co- generation power plant, the Appellant had received grant/aid of INR 82,30,386/- under Government of India US AID Scheme. Further, the Appellant also received cash subsidy of INR 2,25,00,000/- from Karnataka Renewal Energy Development Limited (KREDL). The Assessing Officer reduced the aforesaid amount from the gross block of plant and machinery while computing depreciation. Thus, computing eligible depreciation for the relevant previous year at INR 15,56,86,466/-. The CIT(A) confirmed the order passed by the Assessing Officer in this regard. Therefore, the Appellant is before us in appeal on this issue.
We have heard the rival submissions and perused the material on record. Both the sides agreed that identical issue came up before the Tribunal in appeals preferred by the Appellant for the Assessment Year 2003-04 (ITA No. 2994/Mum/2010) and 2004-05 (ITA No. 2995/Mum/2010). Vide order dated 08.03.2017, the Tribunal disposed off the issues holding as under: “14. What we understand from the above said decision of Hon‟ble Supreme Court is that the subsidy given by the Government to achieve specific objectives like promotion of industries in backward areas etc., is to be considered as an “incentive” and cannot be considered as given to meet the actual cost of asset. In that case, it was held that the subsidy amount need not be deducted from the actual cost, since the same is not given to meet the “actual cost”. The same view was taken by the Visakhapatnam bench of Tribunal in the case of Sasisri Extractions Ltd (2008)(307 ITR (AT) 127),wherein the Tribunal noted that the subsidy was given under a scheme to accelerate industrial development of the State and the incentive 4 Assessment Year: 2005-06 was given for setting up of industries in Andhra Pradesh. The Tribunal considered Explanation 10 to section 43(1) and concluded that the basic principle underlying in the decision of the Apex Court in the case of P.J. Chemicals Ltd (supra) still holds the field. It further observed as under:-
“….Their Lordships analysed the expression “met directly or indirectly” to come to the conclusion that only in a case where a subsidy or other grant was given to offset the cost of an asset, such payment/grant would fall within the expression “met” whereas the subsidy received merely to accelerate the industrial development of the State cannot be considered as payments made specifically to meet a portion of the cost of the assets.”
In the instant case, we notice that the sub-grant was given by USAID to meet the cost of carrying out the GEP Project, i.e., the purpose of giving subgrant is not to achieve a different objective, as we found in the cases discussed above. We notice that the sub-grant has been given to the assessee specifically to meet the cost of assets and the same is evident from the various clauses of agreement extracted by us in the earlier paragraph. Further the agreement mandates that the sub-grant should be used for specific purpose of implementing GEP project and not for any other purpose, meaning thereby, the sub-grant was intended to part finance the cost of installation of cogeneration plant. Hence, in our view, the decision rendered by Hon‟ble Supreme Court in the case of P.J. Chemicals (supra) will not apply to the facts of the present case. In that view of the matter, the decision rendered by the co-ordinate bench of Tribunal in the case of M/s Sasisri Extractions Ltd (supra) will also not apply.
In view of the above, we uphold the view taken by the tax authorities on this issue, i.e., the sub-grant received by the assessee should be deducted from the cost of the assets for the purpose of computing depreciation.
17. The assessee has also pointed out that there are certain computation errors in the quantum of depreciation allowed by 5 Assessment Year: 2005-06 the AO. We restore this matter to the file of the AO for examining the claim of the assessee.”
On perusal of above, it can be seen that the Tribunal had concluded that grant/aid received by the Appellant under Government of India US AID Scheme should be reduced from the cost of assets for the purpose of computing depreciation. Respectfully following the aforesaid decision of the Tribunal, we hold that the Assessing Officer/CIT(A) were justified in reducing amount of INR 82,30,386/- from the gross block of plant & machinery for the purpose of computing depreciation.
As regard subsidy of INR 2,25,00,000/- received from KRDEL, we note that the Assessing Officer had relied upon Note 10 of „Schedule 19 : Notes‟ forming part of the financial statements for the year ended 31.03.2005, the relevant extract of which read as under:
10. The Company is eligible for a Capital subsidy from KREDL to the extent of Rs. 450 lacs which has been accounted as a Capital Reserve. The company has received till date a sum of Rs. 363.97. …….
During the assessment proceedings, the Appellant was asked to details of the capital subsidy and how the same has been utilized. In response, the Appellant submitted that amount of INR 2,25,00,000/- from KREDL was used for co-generation plant. The Assessing Officer relying upon the Explanation 10 to Section 43(1) of the Act concluded that a portion of the cost of the asset acquired by the Appellant has been met by the capital subsidy, and therefore, the cost of asset should be reduced by such subsidy amount.
Before the CIT(A) the key features of subsidy granted by KREDL were cited by the Appellant. It was contended that the 6 Assessment Year: 2005-06 aforesaid subsidy was in the nature of investment incentive for setting up of the project in the area of renewable energy by sugar factory and that the subsidy was not given to meet the cost of the project (directly/indirectly). However, the CIT(A) was not convinced and therefore, confirmed the order passed by the Assessing Officer.
Before us, it was contended that the Ld. Authorised Representative for the Appellant that this issue be remanded back to the file of Assessing Officer for fresh adjudication as neither the Assessing Officer nor the CIT(A) has examined the key features of the scheme under which cash subsidy was granted by KREDL. We find merit in the contentions advanced by the Ld. Authorised Representative for the Appellant as neither the Assessing Officer nor CIT(A) has returned a specific finding to the effect that as per the scheme under which cash subsidy has been granted by KREDL the amount of cash subsidy was to be utilized for meeting the cost of assets. We note that as per statements of facts filed before the CIT(A) the Appellant had received cash subsidy of INR 2,25,00,000/- during the previous year 2003-04 relevant to Assessment Year 2004-05 and the balance amount of INR 2,25,00,000/- during the previous year 2004-05 relevant to the Assessment Year 2005-06 which is before us in the present appeal. It was contended on behalf of the Appellant that the cash subsidy had no relevance to the investment in the project. However, at the same time, the Appellant had admitted during the assessment proceeding that the amount of cash subsidy was utilized for co- generation project. In our view, this issue requires examination. Accordingly, this issue is remanded back to the file of Assessing Officer to examine terms of scheme under which 7 Assessment Year: 2005-06 cash subsidy was granted to the Appellant by KREDL and return of finding as to whether such cash subsidy was intended to be given to meet the cost of co-generation project and to decide the issue taking into account the aforesaid factual findings, the provisions contained in Explanation 10 to Section 43(1) of the Act, and the decision of the Tribunal in the case of the Appellant for the Assessment Years 2003-04 and 2004-05 (ITA No. 2994 & 2995/Mum/2010, dated 08.03.2017) in respect of grant/aid received by the Appellant under Government of India US AID Scheme.
In view of the above, Ground No. 1 raised by the Appellant is partly allowed.
Ground No. 2 pertains to the claim of deduction of INR 57.14 Lacs on account of impairment of assets. During the assessment proceedings, the Assessing Officer noted that the Appellant had claimed deduction of INR 57.14 Lacs on account of impairment loss suffered by the Appellant in respect of investment made in various projects. Details of which are as under: Financial Year Aldehudrie Butane Diol Total Oxidation (INR) (INR) (INR) 2000-01 2563772 2563772 2001-02 1686477 4027160 3149865 Total 1686477 4027160 5713637
15. The above projects were found to be unviable and uneconomical as per the technical reports of the production management and were therefore abandoned before completion/implementation. The Assessing Officer added back the amount of INR 57,14,000/- written off by the Appellant holding the same to be capital in nature. CIT(A) confirmed the Assessment Year: 2005-06 order passed by the Assessing Officer.
16. Therefore, the Appellant is in appeal before us the contention of the Appellant is that the expenses incurred on projects which did not materialize were not capital in nature and had to be allowed as Revenue expenditure. In order to support the aforesaid contention the Ld. Authorised Representative for the Appellant placed reliance on the following judgment of decision:
CIT vs Manganese Ore India Ltd. [2016) 67 taxmann.com 268 (Bom) 2. CIT vs Tata Robins Fraser Ltd. [2012] 26 taxmann.com 15 (Jharkhand)] 3. Idea Cellular Ltd. vs. Additional CIT [(2014) 65 SOT 15(Mum-Trib) (URO) 4. Binani Cement Pvt. Ltd. vs. CIT : [2016 380 ITR 116 (Cal) 5. Aditya Birla Power Company Limited vs. ACIT- [ITA No. 1115/Mum/2012, dated 07.09.2018 (Mumbai Trib.) 6. Gujarat Green Revolution Co. Ltd. vs. ACIT – [(2013) 145 ITD 161 (Ahmedabad)] 7. Lawkin Ltd. vs. JCIT – [2005) 1 SOT 907 (Mum Trib.)]
We have perused the aforesaid judgment cited by the Ld. Authorised Representative for the Appellant. Each of the above judgments turn on the specific facts. However, on perusal of the same it can be seen that the relevant factors to be considered are the purpose/nature of expenses incurred, and whether such expenditure which were recorded under the head capital work-in-progress was incurred for capital asset or new source of income. These aspects have neither been examined by the authorities below nor has been addressed by the Appellant in the contentions raised before the Assessing Officer and the CIT(A). Further, there is no averment to the effect that these expenses would have resulted in running the business Assessment Year: 2005-06 more efficiently. All that has been averred is the units formed part of same business. The allowance of deduction in respect of amount of INR 57,14,000/- written off on account of impairment of assets would require determination of the above factual aspects. Accordingly, we deem it appropriate to remand this issue back to the file of Assessing Officer for fresh adjudication after giving the Appellant an opportunity of being heard and after taking into consideration such details/documents as may be filed by the Appellant in support of its claim before the Assessing Officer. In view of the foresaid directions, Ground No. 2 raised by the Appellant is allowed for statistical purposes.
Ground No. 3 is directed against order of CIT(A) confirming the disallowance of INR 16,48,654/- made by the Assessing Officer holding the same to be prior period expenses.
We have considered the rival submissions and perused the material on record. We note that the Appellant had claimed net prior period expenses computed as under:
Prior Period Expenses INR 18,51,164/- Prior Period Income INR 5,23,133/- Net Prior Period Expenses INR 13,28,031/-
The prior period expenses of INR 18,51,164/- consisted of INR 16,48,654/- claimed by the Appellant to be income offered to tax in the Assessment Years 2003-04 and 2004-05 which has been written off during the relevant previous year and therefore claimed as deduction under the head prior period expenses, and other expenses aggregating to INR 2,02,510/-. The Assessing Officer disallowed INR 2,02,510/- and brought to tax prior period income of INR 5,23,133/-. According to the Assessment Year: 2005-06 Appellant the Assessing Officer also disallowed deduction of INR 16,48,654/-.
21. In appeal preferred by the Appellant on this issue before CIT(A) it was submitted by on behalf of the Appellant the Assessing Officer has accepted the prior period income of INR 5,23,133/- but has rejected the claim for deduction of prior period expenses of INR 2,02,510/-. Therefore, addition of INR 5,23,133/- amounted to double deduction. The CIT(A) directed the Assessing Officer to exclude income already offered to tax by the Appellant from the addition under the head prior period expenses.
22. Before us the Appellant has again contended that prior period expenses of INR 16,48,654/- represents income offered to tax in earlier years which has been written off as the same was not realized. We note that CIT(A) has already granted relief to the Appellant by issuing directions to exclude income already offered to tax in paragraph 6 and 7 of his order. The Revenue is not in appeal against the aforesaid directions. Therefore, Ground No. 3 raised by the Appellant is disposed off as being infructuous.
Ground No. 4 raised by the Appellant is disposed off as being general in nature.
24. Ground No. 5.1 to 5.3 have been raised by the Appellant as additional ground vide letter dated 09.01.2015 wherein it was stated as under: “1. The Godavari Sugar Mills Ltd [GSML], (now known as Somaiya Properties & Investments P. Ltd.), the Applicant herein, had filed its return of income on 31.10.2005 declaring 'NIL' income under the normal provisions of the Assessment Year: 2005-06 act after setting off unabsorbed depreciation for A.Y. 2003-2004 and returned book profit of Rs. 4,53,34,699/-. 2. It is customary and normal practice in the business of sugar manufacturing that purchase price for sugarcane is paid to the farmers in two stages, immediate and adhoc in the year of purchase and additional sugar cane price which is fixed as per the agreement entered into with the farmer later on. 3. For A.Y. 2002-2003, the Applicant had claimed, among others, Rs. 1,14,59,037/- as against sugarcane price, on the basis of the settlement/arrangement entered into with the farmers on 06.09.2004. This claim was rejected on the ground that the claim was crystallized only in A.Y. 2005-2006. It was specifically mentioned by the CIT(A) in his appellate order for A.Y. 2002-2003 that the claim would be examined in A.Y. 2004-2005 or A.Y. 2005-2006 as and when that appeal come up before him. 4. However, while adjudicating this claim [totaling amounting to Rs. 1,28,61,041/-] in the appellate proceeding for A.Y. 2005-2006, on the erroneous impression that this claim was allowed by the A.O. in A.Y. 2006-2007 on the basis of alleged submission of the Applicant the Ld. CIT (A) dismissed this ground as withdrawn. [Ref: Para 16 at Page 7 of the CIT (A) order]. 5. Upon receipt of the order, the Applicant preferred a rectification application before the Ld. CIT(A), to the effect that no such claim was allowed in A.Y. 2006-2007 and no such fact was conceded before him. A copy of the application dated 13.04.2011 is attached as Annexure-
1. 1. This application is not yet disposed off.
6. At the time of filing appeal before the Hon'ble Tribunal, a ground against such action of the Ld. CIT (A) remained to be incorporated inadvertently, on the bonafide but mistaken belief that as the rectification application before the Ld. CIT (A) was pending, no cause of action arose till its disposal.
7. However, while compiling the papers for all the years for preparation of the appeals, this omission has come to light. In the circumstances, the Applicant now seeks to raise the ground against such action of the Ld. CIT (A) as additional ground, as attached.
8. The Applicant most respectfully requests that it be allowed to raise the additional ground, for the following 12
ITA. No. 3591//Mum/2011 Assessment Year: 2005-06 reasons: (i) The facts relevant for arguing the additional ground are already on record of the Department and, as such, entertaining this additional ground will not require investigation into any fresh facts. (ii) The issues raised in the additional ground, in fact, is consequential to the finding arrived at by the Department in A.Y. 2002-2003. (iii) Not taking this ground at the time of filing of Grounds of Appeal before the Hon'ble Tribunal was purely unintentional. (iv) No prejudice would be caused to the other side as, ultimately, the ground is to be adjudicated on merit, along with other grounds.”
25. We have heard both the sides on admitting the additional grounds, as well as on merits. We find that a settlement for determination of final sugarcane price for Season 2001-02 was entered into between the Appellant and sugarcane growers association on 06.09.2004. The Appellant claimed deduction of INR 1,14,59,037/- and INR 14,02,003/- in relation to the same during the Assessment Year 2002-03 and 2003-04. However, according to the Appellant during the assessment proceeding, the aforesaid claim of deduction for additional cane price aggregating to INR 1,28,61,041/- was rejected during the assessment proceeding on the ground that the claim for deduction had crystallized on 06.09.2004 falling within the previous year 2004-05 relevant to the Assessment Year 2005-
06. On perusal of order dated 21.10.2015 passed in pertaining to Assessment Year 2002-03 placed on record by the Ld. Authorised Representative for the Appellant, we find that the ITAT has observed as under: “20. Ground no. 4 relates to the additional sugar cane price of Rs. 1,14,59,037/- which the assessee has claimed on the basis 13 Assessment Year: 2005-06 of purchase of sugar cane.
The assessee submitted that the assessee is in the business of sugar in which it purchases sugar cane from farmers. Normally the sugar cane prices are decided in three stages viz., 1st installment adhoc payment by Central Advisory committee, second installment of case price is recommended by State Government Committee and the third is decided by Sugarcane Growers Association in the relevant area of activity. Considering the same, the sugarcane price for season 2001-02 i.e. A.Y. 2002-03 was decided at Rs. 8.25 per MT while the company had made provision and paid in books of account @ 8.14 per MT. The final price of the season 2001-02 was decided vide MOU with Cane Growers Association and on the basis of the same, vide Internal Order dated 6/9/2014 the final balance price works out as under:- Season Previous A.Y. Quantity Rate Amount (Rs.) Year per QTL 2001- 20.09.01 to 2002- 10,41,730,658 11. 1,14,59,037.24 2002 31.03.02 2003
In the return for assessment year 2004-05, the assessee had made claim for the said additional cane price. However, the same was denied by the AO stating that the assessee‟s contentioin is not acceptable since the final cane price is determined as per settlement dated 6/9/04 which does not fall in the previous year relevant to assessment year 2004-05. The assessee submitted that it is following the mercantile system of accounting and accordingly the claim should have been raised on accrual basis. The sugarcane were consumed during the assessment year 2002-03 and assessee is entitled to claim deduction of additional sugarcane of Rs. 1,14,59,037.24/-. Holding that assessee has not claimed these expenses in return of income and no provisions has been made in books of account, this claim made before the CIT(A) as additional ground of appeal
as the AO has also rejected the claim of the assessee for assessment year 2004-05. The CIT(A) observed that assessee is claiming these expense on the basis of agreement with the sugarcane grower association vide ………..order dated 06.09.2004 and hence the claim has crystallized in the assessment year 2005-06. The CIT(A) held that this claim cannot be allowed in the assessment year 2002-03 and it will be examined on merits in the assessment year 2004-05 or 2005-06 when it came up for hearing before him.
23. Aggrieved by the order of CIT(A), the assessee is in appeal before us. Assessee submitted that this claim of Rs. 14 Assessment Year: 2005-06 1,14,59,063/- got crystallized in the assessment year 2005-06. Assessee submitted that in assessment year 2005-06, the CIT(A) presumed that it should be allowed in assessment year 2006-07. Assessee submitted that it has filed a rectification application u/s 154 before the CIT(A) for assessment year 2005- 06 which is still pending. It was also submitted that his claim got crystallized in assessment year 2005-06 and hence should be allowed.
On the other hand, Ld. DR submitted that it needs to be verified that this be not allowed more than once as assessee is making claim in assessment year 2002-03, 2004-05, 2005-06 and 2006-07.
We have considered the rival submissions. We hold that assessee is following the mercantile system of accounting. Assessee is entitled for the claim of expense on Revenue/trading account on crystallization of the law in the said amount in assessment year 2005-06 although it might pertain to assessment year 2002-03. Hence assessee will be entitled for the said claim for the assessment year 2005-06 subject to verification on merits by authorities below about the bonafide and genuineness of the claim. The authorities below are also directed to verify that the assessee‟s claim is allowed not more than once. The assessee has claimed that this amount in assessment year 2002-03, 2004-05, 2005-06 and 2006-07. Subject to above verification additional claim should be allowed only in assessment year 2005-06 subject to verification and checking by the authorities below and hence the claim of assessee for impugned year is rejected.” (Emphasis Supplied) 26. On perusal of above, it can be seen that the Tribunal had concluded that deduction for final installment of additional sugarcane price for the Season 2001-02 was not allowable as deduction during the Assessment Year 2002-03 as the claim for deduction in respect of additional sugarcane price crystallized on 06.09.2004 falling during the previous year 2004-05 relevant to the Assessment Year 2005-06. The Tribunal also held that subject to verification, claim for deduction in respect of additional sugarcane price shall be allowed in the any 2005- 06. We find that in Ground No. 5 raised before the CIT(A), the Appellant had claimed that the Assessing Officer erred in not allowing deduction for additional sugarcane price of INR
ITA. No. 3591//Mum/2011 Assessment Year: 2005-06 1,28,61,041/- for the Season 2001-02. The claim was rejected by CIT(A) holding as under: “16 In ground No. 5 the assessee is aggrieved by disallowance of additional sugarcane price of Rs. 1,28,61,041/- relating to A.Y. 2002-03. The authorised representative submitted that the AO has allowed the claim of the appellant in A.Y. 2006–07. Hence this ground of appeal has become infructuous. Hence the same is dismissed as withdrawn.”
27. In view of the above, we are of the view that the additional grounds raised by the Appellant do not require examination of any facts not already on record. Accordingly, in view of the judgment of the Hon‟ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT:229 ITR 383, the additional grounds raised by the Appellant are admitted. We now proceed to adjudicate upon the additional ground on merits.
28. In proceedings before us of the Ld. Authorised Representative for the Appellant had submitted that no such submission was made before the CIT(A). Reliance in this regard placed by him on written submissions filed by the Appellant before CIT(A) [placed at page 38 of the paper book filed vide the letter dated 11.08.2015], wherein in relation to the claim pertaining to deduction for additional sugarcane purchase price it was specifically prayed that deduction for additional sugarcane price of INR 1,28,61,041/- be allowed in the Assessment Year 2005-06. We find merit in the contention advanced by the Ld. Authorised Representative for the Appellant. In view of the order dated 21.10.2015, passed in pertaining to Assessment Year 2002-03 we hold that the deduction in respect of additional sugarcane price for Season 2001-02 should be allowed to the Appellant during the Assessment Year 2005-06 since the liability to make payment Assessment Year: 2005-06 towards the same crystallized on 06.09.2004 as per the settlement between the Appellant and the sugarcane growers association regarding last installment for the sugarcane price for the Season 2001-02. Accordingly, we direct the Assessing Officer to allow deduction for INR 1,28,61,041/-, being additional sugarcane price paid/payable by the Appellant as per the aforesaid settlement, dated 06.09.2004, during the Assessment Year 2005-06. Accordingly, the Ground No. 5.1 to 5.3 raised by the Appellant as additional grounds are allowed.
In the result, the present appeal is partly allowed.
Order pronounced on 31.01.2023.