SADASHIVRAO MANDLIK KAGAL TALUKA SAH. SAKHAR KARKHAN LTD,,KOLHAPUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 1,, KOLHAPUR

The assessee pleads the following substantive grounds in the instant appeal: 1) On the facts and in circumstances of the case and in law the Learned CIT(Appeals) erred in law and on merit in confirming the additions made by the Assessing Officer of Rs.31,36,319/- as excess cane price when the cane price was paid in accordance with prevailing market conditions and was based on commercial expediency. 2) On facts and in circumstances of the case the Learned CIT (A) in para 7 of his order has erroneously taken the final cane price for season 2013 – 14 at FRP i.e. Rs. 2449.86 instead of the final cane price actually paid at Rs.2500/- and season 2014 - 15 at FRP i.e. Rs. 2674.31 instead of the final cane price actually paid at Rs. 2675/-. Resulting into unjustified enhancement of income at Rs. 31,36,319/-. This enhancement based on wrong final cane price taken and needs to be deleted. 3) On fact s and in circumstances of the case and in law the Learned CIT(Appeals) erred in enhancing the income by Rs.31,36,319/- and coming to a erroneous conclusion that the entire amount paid to sugar cane farmers is not cost of Sugarcane. The CIT (Appeals) erred in appreciating that the amounts paid were on the basis of the quantity of sugar cane supplied by the farmers during the season and therefore was nothing but cost of sugarcane. 4) On the facts and in circumstances of the case and in law the Learned CIT(Appeals) erred in law and on merit in confirming the additions made by the Assessing Office of Rs.3,84,16,103/- as sugar cane supplied at concessional rate to its members. 5) On facts and in circumstances of the case and in law the Learned CIT(Appeals) has erred in holding that the appellant was not entitled to deduction u/s. 80P (2) (a) (iii) when the issue was fully, covered in the assesses favour by the decision of Punjab & Haryana High Court in case of Budhewal Co.op. Sugar Mills Ltd. as reported in 315 ITR 351. 6) On the facts and in circumstances of the case and in law the Learned CIT(Appeals) erred in law and on merit in initiating penalty under section 271(1)(c) of the Income Tax Act, 1961.

Mr. Jasanani vehemently supported the learned lower authorities action on all three counts i.e. assessee‟s payment of excess cane price, sale of sugar at concessional rate (both to members) and section 80P(2) deduction; disallowed in both the lower proceedings. He fails to dispute that the former twin issues of excess cane price payment as well as sugar at concessional rate are no more res integra as the tribunal‟s various co-ordinate benches, and more particularly ITA No.68/PUN/2018 in The Malegaon Sahakari Sakhar Karkhana Limited vs. ITO order dated 21.40.2021 has set aside the concerned assessee‟s substantive grounds back to the assessing authority for its afresh appropriate adjudication. And also that the hon‟ble Punjab & Haryana high court (supra) has accepted section 80P deduction on identical income derived from the sugar co-operative members. We thus accept the assessee‟s third and last substantive ground raising 80P deduction in principle and leave it open for the Assessing Officer

This assessee‟s appeal is partly allowed in above terms.