SHRI GANESH SAHAKARI SAKHAR KHARKHANA LIMITED,AHMEDNAGAR vs. DCIT AHMEDNAGAR CIRCLE, AHMEDNAGAR

ITA 119/PUN/2025Status: DisposedITAT Pune18 August 2025AY 2009-107 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that both the issue of excess cane price paid to members and the issue of sale of sugar at a concessional rate should be restored to the file of the Assessing Officer (AO) for fresh adjudication. For the excess cane price, the Tribunal noted the insertion of Section 155(19) of the Act and the pending application before the AO, deeming it proper to restore the issue for fresh adjudication. Regarding the sale of sugar at a concessional rate, the Tribunal directed the AO to consider the documents filed by the assessee, the GR issued by the State Government dated 01.03.2006, and the assessee's plea to calculate the difference between the levy price and the concessional price instead of the market price and concessional price. The AO was instructed to decide the issue afresh in accordance with the law after providing an adequate opportunity of being heard. The grounds raised by the assessee on these issues were allowed for statistical purposes. Similarly, the issue of disallowance of agricultural income for AY 2012-13 was restored to the AO for fresh adjudication after giving a reasonable opportunity of hearing. The Tribunal found that the facts and grounds in the other appeals were identical to the lead case, and therefore, the findings would apply mutatis mutandis.

What were the facts?

The assessee, Shri Ganesh Sahakari Sakhar Karkhana Ltd., filed four appeals before the ITAT Pune against orders of the CIT(A)/NFAC for Assessment Years (AYs) 2009-10, 2010-11, 2012-13, and 2013-14. The appeals pertained to additions made by the Assessing Officer (AO) on account of (i) sale of sugar at a concessional rate to its members and (ii) excess sugarcane payment to farmers. For AY 2010-11, the AO had made additions of Rs. 1,05,81,183/- for concessional sale of sugar and Rs. 21,83,24,806/- for excess sugarcane payment. The CIT(A) had restored the excess cane price issue to the AO for fresh adjudication and partly allowed the concessional sugar sale issue by directing the AO to quantify and disallow only the excess quantum at the prevalent market rate. For AY 2012-13, an additional ground related to disallowance of agricultural income of Rs. 1,22,324/- was raised.

What were the issues?

1. Whether the disallowance and addition of Rs. 21,83,24,806/- on account of excess cane price paid to members is justified, considering the insertion of Section 155(19) of the Income Tax Act, 1961, and the pending application before the AO. (Mixed law and fact, turns on Section 155(19)). 2. Whether the disallowance and addition of Rs. 1,05,81,183/- on account of sugar sold at a concessional rate to members is justified, and if so, whether the calculation should be based on market price or levy price. (Mixed law and fact, turns on Section 40A(2)). 3. Whether the disallowance of Rs. 1,22,324/- on account of agricultural income for AY 2012-13 is justified, given the assessee's claim of being able to substantiate it with further evidence. (Mixed law and fact). Assessee's contentions: The assessee argued that the issue of excess cane price should be set aside to the AO for re-examination in light of Section 155(19) and a pending application. Regarding concessional sugar sale, the assessee requested the issue be set aside to the AO to re-examine facts in light of the Supreme Court's decision in CIT Vs. Krishna Sahkari Sakhar Karkhana Ltd. and to calculate the difference between levy price and concessional price instead of market price. For agricultural income, the assessee submitted it could substantiate its claim if given an opportunity. Revenue's contentions: The Revenue had no objection to restoring the issue of excess cane price to the AO. For the concessional sugar sale, the Revenue had no objection to restoring the matter to the AO to verify details and decide in light of the Supreme Court's decision in Krishna SSK Ltd.

Which sections of the Income-tax Act were involved?

Section 155(19),Section 40A(2),Section 143(3),Section 254,Section 144B,Section 154,Section 155(7)

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Hanmant Dattatry Dhavale
For Respondent: Shri Amol Khairnar

PER ASTHA CHANDRA, JM : The above four appeals filed by the assessee are directed against the separate orders dated 20.12.2024 and 25.10.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)"] pertaining to Assessment Years ("AYs”) 2009-10 and

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