PER BENCH : This batch comprising of certain appeals by the assessees and the others by the Revenue relate to different assessment years captioned above. Since most of the appeals have at least one common issue, we are, therefore, disposing them off by this consolidated order for the sake of convenience.

2. Some of the appeals are recalled matters. Some of the appeals are time barred. We have gone through the reasons given for delay in the presentation of the such appeals, with which we are satisfied. As such, the delay in all such cases is condoned and the appeals are admitted for disposal on merits. Assessee (s) Represented by Shri Pramod Shingte Shri Prasanna Joshi Shri K. Srinivasan Shri M.K. Kulkarni Shri Prateek Sandbhor Shri Laxman R. Nawale (Employer) Ms. Deepa Khare None Appeared Sl.Nos. 16, 18, 35, 36 to 41, 48, 49 to 50, 51 to 52, 93, 94, 99, 114, 148 to 149 and 150 Revenue by Ms. Nandita Kanchan Date (s) of hearing 12-03-2019 & 13-03-2019 Date of pronouncement 14-03-2019 SSK Group cases 16 I. EXCESSIVE SUGARCANE PRICE PAID

3. 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 as well as non-members of the respective assessees. On a representative basis, we are espousing the facts in the case of Majalgaon Sahakari Sakhar Karkhana Limited Vs. ACIT, Circle-3, Aurangabad ITA No.308/PUN/2018 for the assessment year 2013-14. The assessee is engaged in the business of manufacturing of white sugar. During the course of assessment proceedings, the AO observed that the assessee paid excessive cane price, over and above the Fair and remunerative price (FRP) fixed by the Government, to its members as well as non-members. On being called upon to justify such 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 the Income-tax Act, 1961 (hereinafter also called ` the). Relying on the judgment of Honble Supreme Court in the case of DCIT Vs. Shri Satpuda Tapi Parisar S.S.K. Ltd. and others (2010) 326 ITR 402, the AO opined that the excessive price paid was in the nature of `distribution of profits and hence not deductible. This is how, he computed the excessive cane price SSK Group cases 17 paid both to the members and non-members at Rs.22,02,95,387/- and made addition for the said sum. The ld. CIT(A) echoed the assessment order on this point.

4. 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, fully or partly by the ld. CIT(A), whilst in others the addition got sustained. This led to filing of the cross appeals both by the assessee as well as the Revenue before the Tribunal.

5. We have heard both the sides and gone through the relevant material on record. There is consensus ad idem between 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 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 SSK Group cases 18 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 authorizes 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 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 of profits and hence not deductible as expenditure. He, therefore, made an addition for such sum paid to members as well as non-members. When the matter finally came up before the Honble Apex Court, it noted that clause 5A was inserted in the year 1974 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 between 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 SSK Group cases 19 accounts are settled and 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, 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 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 final price/additional purchase price/SAP under clause 5A of the Control Order, 1966 and thereafter determine 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 component of profit which will be a part of the final determination of SAP and/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 difference between the SSK Group cases 20 SMP and the SAP per se cannot be said to be an appropriation of profit. As observed hereinabove, only that part/component of profit, while determining the final price worked out/SAP/additional 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 statement of accounts, balance sheet and the material 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. Merely because the higher price is paid to both, members and non- members, qua the members, still the question would remain with respect to the distribution of profit/sharing of the profit. So far as the non-members are concerned, the same can be dealt 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 take into account the manner in which the business works, the modalities and manner in which SAP/additional purchase price/final price are decided and to determine what amount would form part of the profit 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.

6. Both the sides are unanimously agreeable that the extant issue of deduction for payment of excessive price for purchase of sugarcane, raised in most of the appeals under consideration, 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 matter 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 deduction for the price paid under clause 3 of the Sugar Cane (Control) SSK Group cases 21 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 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 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 such fresh determination of the issue.

7. It is noted that in some of the appeals, the assessees have raised an alternate ground for allowing deduction u/s.80P in respect of the addition. SSK Group cases 22

8. The ld. ARs, in some of the cases, which were represented by them, were fair enough not to press such ground as it is only an alternate ground and having become infructuous in view of the restoration of the matter to the AO. No argument was advanced in support of such ground in other cases, even where the ld. ARs participated in proceedings before the Tribunal. Therefore, the said alternate ground in all such cases is dismissed.

9. Apart from the above issue, which is common in almost all the appeals in this batch, there are certain appeals having other issues also. We will take up such issues one by one. II. ADDITION FOR SUGAR GIVEN TO MEMBERS AT CONCESSIONAL RATES [Appeals in which Krishna Sahakari Sakhar Karkhana Limited (SC) not considered by lower authorities ]

10. In some of the appeals, there is another issue of giving sugar to members at concessional rates. Such ground is against the disallowance on account of price difference on certain quantity of sugar given to the members at concessional rate.

11. Having heard both the sides and gone through the relevant material on record, it is observed that the AO made addition of the SSK Group cases 23 difference between the market price and the concessional price at which sugar (final product) was given to farmers and 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 25-09-2012, the Honble Supreme Court noticed that the difference between the average price of sugar sold in the market and the price 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 abovementioned practice of selling sugar at concessional rate has become the practice or custom in the Co- 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/cane growers/Members each year on month-to-month basis, apart from others from Diwali

The issue under consideration can be decided by an appropriate lower authority only on the touchstone of the relevant factors noted in the above judgment. In our considered opinion, it would be just and fair if the impugned orders SSK Group cases 24 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 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 in the case of Krishna Sahakari 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 of 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 CONTRIBUTION TO AREA DEVELOPMENT FUND

12. Another issue in some of the appeals is against the deletion/confirmation of disallowance made by the AO on account of Area Development Fund.

13. Having heard both the sides and gone through the relevant material on record, it is seen that similar issue came up for SSK Group cases 25 consideration before the Honble Supreme Court in the case of Siddheshwar Sahakari Sakhar Karkhana Limited Vs. CIT and others (2004) 270 ITR 1 (SC) [LQ/SC/2004/1003] . In that case, the Honble Supreme Court observed in para 44 that the receipts in the form of Area Development Fund always remained with the assessee. It also noted the contention of the assessee in para 45 that the realisations made towards the Area Development Fund were impressed with the specific legal obligation to spend the money for specified purposes which were unrelated to the business of the sugar factory and hence, could not be treated as income of the assessee. Eventually, the Honble Supreme Court remitted the matter back for fresh determination. It is noticed that in the appeals under consideration, the ld. CITs(A) have not considered the impact of the judgment of the Honble Supreme Court in Siddheshwar Sahakari Sakhar Karkhana Limited (supra) and decided the issue without taking note of the factors directed to be considered in the aforenoted case. In view of the above decision of Honble Supreme Court, we set-aside such impugned orders and remit the matter to the file of the respective AOs for deciding the issue afresh in conformity with the guidelines laid down by the Honble Apex Court in the above judgment. SSK Group cases 26 IV. DISALLOWANCE FOR LATE DEPOSIT OF EMPLOYEES SHARE IN EPF ETC.

14. Another issue in some of the appeals is against the confirmation of disallowance for delayed deposit of ESI / EPF employees share. During the course of assessment proceedings, it was noticed that the assessee belatedly deposited the amount of employees contribution towards EPF and ESI. The details of due dates and actual payments have been set out in the respective assessment orders. The AO, therefore, made such disallowance, which came to be affirmed in the first appeal.

15. We have heard the rival submissions and perused the relevant material on record. It is found that the issue raised herein is no more res integra. The Honble Apex Court in the case of CIT v. Alom Extrusions Limited (2009) 319 ITR 306 (SC) [LQ/SC/2009/2062] has held that the amendment to first proviso and omission of the second proviso to section 43B by the Finance Act, 2003, is retrospective. The Honble Delhi High Court in the case of CIT v. Aimil Limited (2010) 321 ITR 508 (Delhi) has allowed deduction in respect of employees share when the amount was paid before the due date. When we consider these two judgments, it is manifested that both the employers and employees contribution are allowable as SSK Group cases 27 deduction if these are deposited albeit belatedly under the respective Acts, but before the due date of filing of return u/s 139(1) of the.

16. It is seen as an admitted position that the assessees in such cases deposited the employees contribution towards EPF and ESIC before the due date u/s 139(1) of the. Respectfully following the aforenoted judgment of the Honble Delhi High Court, we order for the deletion of the addition sustained in the first appeals on account of late deposit of employees contribution to the Provident fund. V. PROVISION FOR VASANTDADA SUGAR INSTITUTE (VSI) CONTRIBUTION :

17. Another issue raised in some of the appeals is against the confirmation of disallowance of contribution to Vasantdada Sugar Institute (VSI). The AO observed that the assessee made provision for Vasantdada Sugar Institute (VSI) contribution and claimed weighted deduction at 125% u/s.35(1)(ii) of the. The said amount was not paid to the institute. The same being only in the nature of provision, the AO did not allow deduction u/s.35(1)(ii). The ld. CIT(A) decided this issue in favour of the assessee by following an order passed by the Pune Benches of the SSK Group cases 28 Tribunal in the case of Bhima S.S.K. Ltd. (ITA No.1414/PUN/2000).

18. We have heard both the sides and gone through the relevant material on record. It is found that the ld. CIT(A) has determined this issue in favour of the assessee by following the order passed by the Pune Benches of the Tribunal in the case of Bhima S.S.K. Ltd. (supra). No material has been placed on record to show that this order of the Tribunal has been reversed or modified in any manner by the Honble High Court. Respectfully following the precedent, we decide this issue in favour of the assessee. VI. CONTRIBUTION TO CHIEF MINISTER RELIEF FUND :

19. Another issue raised in some of the appeals is against the confirmation of addition on account of contribution made to Chief Minister Relief Fund.

20. The assessee contributed certain amount in the Chief Minister Relief Fund and claimed deduction for the same in its Profit and loss account. The AO observed that this fund established by the State Government is covered u/s.80G(iiihf) of the and, as such, the contribution is deductible at 50% of the aggregate of the sums specified. He, therefore, disallowed the amount, which action came to be countenanced in the first appeal. SSK Group cases 29

21. We have heard both the sides and gone through the relevant material on record. There is no dispute that the assessee did make contribution to the Chief Minister Relief Fund. As against the assessee claiming the entire amount as deduction in its Profit and loss account, the AO opined that the said contribution was eligible for deduction u/s. 80G(iiihf) of the at the rate of 50% along with other qualifying sums. The ld. CIT(A) sustained the entire addition overlooking the fact that deduction u/s.80G(iiihf) was not allowed by the AO on such contribution in the computation of total income. Under these circumstances, we cannot uphold the disallowance of the entire amount claimed as deduction by the assessee in its Profit and loss account. Approving the additions made, we remit the matter to the file of the AO for granting the deduction u/s.80G(iiihf) as per law after allowing a reasonable opportunity of hearing to the assessee. VII. KHODKI CHARGES

22. Another issue raised in some of the appeals is against non- granting of deduction towards payment of Khodki charges. On being called upon to justify such deduction, the assessee submitted that this payment was made as per the order of the Director of Sugar. It was further explained that at the time of harvesting, the SSK Group cases 30 harvesting labour cut more part of the upper side of the crop and therefore, to compensate loss in weight to the grower, the said Khodki charges were paid to the farmers. The AO was not satisfied with the explanation tendered on behalf of the assessee. He noted that the Commissioner of Sugar, on behalf of Government of Maharashtra, was issuing directions for payment of Khodki charges only on the basis of proposal sent by the respective assessees. The ld. CIT(A) deleted the addition by relying on the judgment of Honble Bombay High Court in CIT Vs. Manjara Shetkari SSK Ltd. and others (2008) 301 ITR 191 (Bom.) [LQ/BomHC/2007/1631] , against which the Revenue has come up in appeal before the Tribunal.

23. We have heard both the sides and gone through the relevant material on record. It is seen that Khodki charges were incurred as per the directions of the Director of Sugar to compensate for the farmers loss for unevenly cutting of cane sugar at the time of harvesting. This issue came up for consideration before the Special Bench of the Tribunal in DCIT Vs. Manjara Shetkari SSK Ltd. (2004) 85 TTJ (Mum.)(SB) 369, which granted deduction for said expenses. On further appeal by the Revenue to the Honble Bombay High Court, their Lordships in the aforenoted case approved the view taken by the Tribunal allowing deduction for payment of such Khodki charges. The ld. CIT(A) has recorded SSK Group cases 31 that the SLP filed by the Department in the case of Jadamba SSK Ltd., on similar issue, has been dismissed by the Honble Supreme Court on 23-03-2009. In view of the fact that Khodki charges have been held as deductible by the Honble jurisdictional High Court and the recent judgment of Honble Supreme Court in Tasgaon Taluka Sahakari Sakhar Karkhana Ltd. (supra) does not cover Khodki charges, we hold that this issue needs to be decided in favour of the assessee. VIII. DEDUCTION u/s.80P ON INTEREST AND DIVIDEND

24. In some of the appeals the issue of deduction under section 80P of theon interest and dividend income is also involved. The assessee claimed deduction u/s.80P(2)(d) of the on interest and dividend received from Co-operative Society on Savings Bank accounts. The AO did not allow such deduction. The ld. CIT(A) overturned the assessment order on this point and granted deduction. The Revenue is aggrieved by such allowing of deduction.

25. We have heard both the sides and gone through the relevant material on record. Relevant part of section 80P reads as under : -

80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to SSK Group cases 32 the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely : (a) to (c) (d) in respect of any income by way of interest or dividends derived by the cooperative society from its investments with any other co- operative society, the whole of such income; ........

26. A cursory look of the above provision deciphers that any amount of interest or dividend derived by a Co-operative Society from its investments with any other Co-operative Society, is deductible under clause (d) of section 80P(2) of the. The ld. CIT(A) has given a categorical finding that assessee is a Co- operative Society and the Co-operative Bank from which the above-mentioned income was earned, is also a Co-operative Society duly registered under Maharashtra Cooperative Societies Act. This contention has not been controverted by the ld. DR with any cogent material or evidence. Thus, it is seen that the case of the assessee is fully covered u/s.80P(2)(d) of the. Reliance of the AO on the provisions of sub-section (4) of section 80P is misplaced. Such provision states that : ` The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. As the assessee under SSK Group cases 33 consideration is not a Co-operative Bank, the mandate of sub- section (4) does not extend to it. We, therefore, approve the view taken by the ld. CIT(A) in granting deduction u/s.80P(2)(d) of the in respect of interest and dividend income earned by the assessee on such facts.

27. In the result, all the appeals are fully/partly allowed for statistical purposes. Order pronounced in the Open Court on 14 th March, 2019. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT Pune;
Dated : 14 th March, 2019         /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 // Senior Private Secretary , / ITAT, Pune SSK Group cases 34 Date

1. Draft dictated on 12-03-2019 Sr.PS

2. Draft placed before author 14-03-2019 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. *