PER BENCH : These bunch of 44 appeals by the assessee and the Revenue for assessment years mentioned in the caption against the names of the assessees, are directed against the orders of Commissioner of Income Tax (Appeals), in the respective cases. All the assessees, in the present set of appeals are running co-operative sugar factories. They purchase sugarcane from the farmers and sale white sugar after manufacturing the same. The core issues raised in these bunch of appeals are as under:- i. Taxability of Excess Sugarcane Price paid by the assessees to sugarcane suppliers, i.e. the price over and above the Statutory Minimum Price (SMP) fixed by State Government for purchase of cane. ii. Taxability of Concessional Sugar Price qua the levy price and the manner of giving effect to the directions of the Honble Apex Court in the case of CIT vs. Krishna SSK, (2012) 211 taxmann.com 109 (SC).

2. We shall now take up each of the above issues in the following paragraphs of this composite order. A. Excess Sugarcane Price Paid to Sugarcane Suppliers

3. The brief facts on this issue of Excess Sugarcane Price i.e. first core issue, include that the production of sugar is covered by the Essential Commodities Act, 1955. According to clause 3 of the Sugarcane (Control) Order, 1966, the Central Government may, after SSK Group Cases consultation with such authorities, bodies or associations as it may deem fit, by notification in the Official Gazette, from time to time, fix the minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them. This is the statutory minimum price and no such producer or agent shall purchase or agree to purchase sugarcane, at a price lower than that fixed under clause 3. While fixing the statutory minimum price, the Central Government is required to consider the cost of production of sugarcane, the return to the grower from alternative crops and the general trend of prices of agricultural commodities, the availability of sugar to the consumer at a fair price, the price at which sugar produced from sugarcane is sold by producers of sugar, and, the recovery of sugar from sugarcane. Clause 5A was inserted in the order in the year 1974 on the basis of the recommendations made by the Bhargava Commission for payment of an additional price for sugarcane purchased on or after October 1, 1974 (in addition to the minimum sugarcane price fixed under clause 3) at the end of the sugarcane season on a 50:50 profit-sharing basis between growers and factories, to be worked out in accordance with the Second Schedule to the Order. The additional price is determined under clause 5A at the end of the season. The assessees purchase sugarcane from growers who are their members, as well as from non-members and use the same for manufacturing of sugar. For the purchase of sugarcane, the assessee paid to members and non-members a final price which was in excess of that payable under clause 3 and 5A of the Sugarcane (Control) Order,

1966. The Assessing Officer took a view that the difference between the price paid by the assessees and in terms of clause 3 of the Order, SSK Group Cases determined by the Central Government, and the price determined by the State Government under clause 5A of the Order (and consequently paid by the assessee to the cane growers) was a distribution of profits and not deductible as expenditure. Alternatively, the Assessing Officer also held that the excess cane price paid to the cane growers over the statutory minimum price was disallowable under section 40A(2)(a) as excessive and unreasonable. The CIT(A) held that the price actually paid for the procurement of sugarcane was to be allowed as business expenditure, and that the excess payment of cane price as fixed by the State Government over and above the statutory minimum price for sugarcane to members and non-members could not be disallowed under section 40A(2)(b) of the Act, despite the fact that profit was one of the components in the price.

4. Referring to the facts and issues, the Ld. Authorised Representatives appearing on behalf of the assessees and Ld. Departmental Representatives representing the Department, submitted, at the outset, that the issue of excess sugarcane price raised in present set of appeals by the assessees/Revenue have already been considered and adjudicated by the Co-ordinate Bench of Tribunal in bunch of appeals with the lead case i.e. DCIT vs. Vasant Rao Dada Patil SSK Ltd. vide ITA Nos.50 to 52/PUN/2012 for the assessment years 1992-93, 1994-95 & 1996-97 respectively dated 20.03.2019.

5. The Co-ordinate Bench (supra) after considering the binding judgment of Honble Supreme Court in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. reported as 103 taxmann.com 57, has decided this issue as under : SSK Group Cases 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 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 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. SSK Group Cases However, at the same time, the entire/whole amount of difference between the 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) 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. SSK Group Cases

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.

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.

6. From the above, it is evident that, following the judgement in the case of Tasgaon Taluka SSK Ltd. (supra), the Tribunal remitted the issue to the file of the Assessing Officer with the direction to determine what constitutes taxable profits and what constitutes an allowable deduction.

7. Shri Prasanna Joshi representing the assessees submitted that in these bunch of appeals there is segment of appeals wherein the ratio laid down by the Honble Apex Court in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. (supra) does not apply. The ld. AR submitted that the Statutory Minimum Price (SMP) regime came to an end on 22-10-2009. Thereafter, the cane price paid to farmers from Financial Year 2009-10 was on the basis of Fair and Remunerative Price (FRP). The ld. AR further explained the purpose of fixing FRP and sought directions that the issue relating to payment to cane growers by the assessee towards purchase of sugarcane post October, 2009 should be made independent of the directions in the case of CIT Vs. Tasgaon Taluka S.S.K. Ltd. (supra). The ld. AR contended that in the changed scenario, w.e.f. assessment year 2009-10 it would be difficult to give effect to the decision of Honble Apex Court. The ld. AR further pointed that the Co- ordinate Bench of Tribunal in the case of bunch of appeals lead case SSK Group Cases being Siddheshwar Sahakari Sakhar Karkhana Ltd. Vs. DCIT in ITAT No. 1210/PUN/1997 decided on 01-05-2019 has dealt with this issue. We have considered the submissions of ld. AR, the appeals are restored back to the file of Assessing Officer leaving the question open for consideration and examination by the Assessing Officer. The assessees are at liberty to raise all their contentions before Assessing Officer.

8. Thus, in view of the assertions made by both the sides that the facts in the present set of appeals being identical to the issue relating to excess sugarcane price paid by the assessee the issue is restored to the file of Assessing Officer with similar directions as above in the cases of M/s. Vasant Rao Dada Patil SSK Ltd. (supra) and also consider the contentions of assessee with respect to SMP vis-a-vis FRP regime, where ever raised. The Assessing Officer shall decide the issue, after affording reasonable opportunity of hearing to the respective assessees, in accordance with law. Thus, the issue of excess cane price paid to sugarcane suppliers is allowed for statistical purposes in the aforesaid terms. B. Defective manner of giving effect to the directions of the Honble Apex Court in the case of CIT vs. Krishna SSK, (2012) 211 taxmann.com 109 (SC)

9. Taxability of sale of sugar at concessional rates to the members/shareholders. The facts relevant to this issue are that the assessees are engaged in the business of purchase of sugarcane, manufacturing of sugar in their mills and are selling sugar to the members and non-members. All these SSK sell sugar at concessional price to the farmers, who are the members of Sahakari Sakhar Karkhana SSK Group Cases (SSK). These members supply sugarcane to the SSK manufactures. The concessional rate of sugar is lower than the price set by the Government (levy sugar). The said concession i.e. the differences between the levy price set by the Government and the sale price to members, was deemed by the Assessing Officer in the scrutiny assessments as income of the assessee. This issue eventually travelled to the Honble Supreme Court in the case of Krishna SSK Ltd. (supra). After due consideration, the Honble Supreme Court gave certain directions to the Income Tax Authorities and remanded the matter to the file of the CIT(A) for complying with the said directions before taxing any such concessional sugar price to the farmers. The details of these directions are discussed in the succeeding paragraphs of this order.

10. In all these bunch of appals, respective CIT(A) passed their orders after considering the said judgment by the Apex Court. However, while giving effect to the said directions, the CIT(A) failed to comply with the directions strictly. For example, the direction relating to income nature of the said concession in sale price and includibility of the concessional sugar price in the total income of the assessee stands unattended by the CIT(A) while passing the order. The adjudication on this crucial direction is essential. In the absence of the decision of the lower authorities on these crucial issues, it is not possible for the Tribunal to adjudicate the issues under consideration raised by the appellants/department. In the above background, both, the counsels for the assessees and the Revenue fairly submitted that there is requirement of clear finding of fact and law on the directions by the Honble Supreme Court of India. Thus, the includibility of such concessional sugar price in the total income of the SSK Group Cases assessee assumes great significance and the same is conspicuously missing in the impugned orders of the respective CIT(A).

11. In the light of above, the ld. AR for the assessee furnished following written submissions raising the issues for consideration of the CIT(A) in respective cases :- 1. Honble ITAT, Pune, in Chh. Shahu SSK ITA No. 1924-26/PN/90 vide order dated 8/8/1996, at paras 32-39, following ratio of A. Raman & CO, 67 ITR 11 (SC), held that no income accrued to the assessee on sale of sugar at concession rate to its members.

2. Honble Bombay High Court, in CIT v. Terna SSSK, 301 ITR 222 , has noted that Counsel for the Dept, in view of Circular No. 117 dt. 22/8/1973 did not press this ground in appeal.

3. Honble Supreme Court, in CIT v. Krishna SSK, (2012) 211 Taxman 109 (SC) , has not referred to Dept, not pressing this issue in High Court. Honble Supreme Court has given following directions to the CIT(A) to decide the issue: a) Whether the difference between market price and the concessional price of sugar sold to members / farmers / cane growers, should or should not be added to total income of the assessee society b) The CIT(A) will take into account whether the practice of selling sugar at concessional rate to its members / farmers / cane growers, has become a practice or custom in co-operative sugar industry c) Whether any resolution has been passed by State Govt. supporting the practice d) CIT(A) will also consider on what basis the quantity of sugar is sold on month to month basis, apart from Diwali.

4. After above judgement of Honble Supreme Court was pronounced, in various appeals decided by different CIT(A)s, they have taken differing approaches, wherein: a) CIT(A)s have not decided the issue that was directed by the Honble Supreme Court as to

whether difference between market price and concessional price of sugar sold should or should not be added to total income of the assessee society

. (emphasis ours) This issue revolves round whether the income sought to be assessed in the hands of the assessee society had at all accrued to it. In of the some of the submissions to C1T(A), this issue was specifically raised and ratio of Honble Supreme Courts judgement in A. Raman & CO, 67 ITR 11 (SC) was relied upon. However, the CIT(A)s have not dealt with the same. It has been submitted to the Honble ITAT that assessee society has not made secret profits nor has received this difference in price back from the members and as such fictional income which is not received by the assessee cannot be taxed in its hands as held by Honble Supreme Court in CIT v. Calcutta Discount Co. Ltd, 91 ITR 8 (SC). b) In some appeals before CIT(A), assessee has relied upon the CBDT Circular No. 117 for the proposition that rebate given by Co-op. Society to its members was not disallowable in Societys hands and therefore the discount given to members in the price of sugar should not be taxed in the hands of the Co-op. Society. In some appeals the CIT(A), after noting the directions in Krishna SSK, has SSK Group Cases held that relying on the Circular, the said concession given by assessee is not taxable in its hands. c) In most of the appeals, CIT(A)s have held that supplying sugar at a concession price to members and cane suppliers has become a trade practice and custom of the industry. CIT(A)s have noted that State Govt. has now brought strict uniformity in this practice by issuing an order dt. 1/3/2006 u/s 79A of MCS Act, stating the eligibility for society to sell such sugar, its price and monthly quantum. d) Most CIT(A)s, having noted the aforesaid order dt. 1/3/2006, held that sugar sold at prices lower than levy sugar as provided of in the said order, would be taxable in assessees hands at the difference between levy price and concessional price charged for infringement of the order. e) Some CIT(A)s held that concession sugar sold in excess of quantum permitted by order dt. 1/3/2006, would be taxable in the hands of the assessee society for infringement of the order. f) Some CIT(A)s held that concession sugar sold to cane growers who were not members was not permitted by order dt. 1/3/2006 and as such was its infringement and therefore, the concession given was taxable in the hands of the assessee society. g) Some assessee societies have not sold concessional sugar every month but only during Diwali or Gudi Padwa. If such sales were less than 5 kgs per month for the year, CIT(A)s have accepted them to be within the quantum of the order dt. 1/3/2006. h) Most CIT(A)s have not considered the submission that the Honble Supreme Court in Krishna SSK, had specifically excluded the quantum sold during Diwali and therefore the Diwali sales of sugar at concession to members / cane growers were found acceptable by the Honble Court.

5. It is in the above back ground that the concession given in sugar sold by assessee societies to members or cane growers is required to be adjudicated. On perusal of assessment orders and appellate orders of the CIT(A)s it is seen that the very first issue to be decided, i.e. whether difference between market price and concessional price of sugar sold should or should not be added to total income of the assessee society has not been adjudicated by the lower authorities. This issue goes to the root of the matter and it is necessary for the revenue authorities to consider the same, record their findings and reasons for their decision.

6. In the event revenue authorities hold that the difference between market price and concessional price of sugar is not at all to be taxed in the hands of the assessee society, then the matter stands concluded and no further findings are required.

7. If however, revenue authorities hold that it is the difference between levy price of sugar plus excise duty (as directed in order dt. 1/3/2006) and the price charged to members / cane suppliers which is to be taxed in the hands of assessee society, they may record their findings and reasons for their decision considering assessee societies contentions that they have not received this difference and hence it is not their income.

8. In the event of aforesaid difference (in 6 or in 7 above) is taxed as income in the hands of the assessee society, the quantity of sugar sold to members / cane growers which is being taxed be specified by the revenue authorities with their findings and reasons for the same. In arriving at the above findings and reasons, as directed by the Honble Supreme Court in Krishna SSK, the authorities would be required to consider: (a) impact of custom and trade practice; SSK Group Cases (b) the States policy; (c) basis for monthly sales; and (d) sales during Diwali

12. In the light of the above, it is the submissions of AR for the assessee and the ld. DR that all these bunch of appeals need to be remanded to the file of Assessing Officer for fresh adjudication for the purpose of giving effect to the directions of Honble Apex Court in proper perspective.

13. On hearing both the sides, we find there is merit in the submissions of the AR. In all these appeals, the CIT(A) has failed to decide the appeals of the assessees in consonance with the above discussed direction of Honble Apex Court in the case of Krishna SSK Ltd. (supra). Accordingly, in these bunch of appeals the issue of sale of sugar at concessional price to the members should be ideally remanded to the file of Assessing Officer for fresh consideration and adjudication of the issue on merits and law. In fact, the Honble Supreme Court remanded the issue to the file of the CIT(A) for complying its direction in the case of Krishna SSK Ltd. (supra). However, in order to avoid multiplicity of the proceeding before different officers, and to be in tune with our findings given in para 7 of this order, we find, remanding to the file of the Assessing Officer is appropriate. Thus, we order accordingly. The Assessing Officer shall grant reasonable opportunity of hearing to the assessees, in accordance with law. Accordingly, the grounds raised in the appeals of the Revenue and the assessee are allowed for statistical purposes. SSK Group Cases

14. Apart from the core issues relating to excess cane price paid to sugar cane suppliers and sale of sugar at concessional rate to the members/shareholders there are other issues that have emerged in these appeals. These issues are tabulated here-in-under : i. Disallowance of carried forward business loss and unabsorbed depreciation. ii. Provision for Vasantdada Sugar Institute (VSI) Contribution. iii. Disallowance of Cane Harvesting and Transportation Expenditure. iv. Disallowance of prior period expenditure. v. Sale of bio-compost at concessional rate. vi. Disallowance of advertisement expenditure. vii. Disallowance of Sabha Samarambh expenses. viii. Disallowance of late payment of Provident Fund. ix. Disallowance of Government Guarantee Fee. x. Addition on account of contribution towards Chief Minister relief fund. xi. Loan refund. xii. Disallowance of unpaid professional tax u/s. 43B. xiii. Disallowance of VAT. xiv. Disallowance of Khodki charges. xv. Disallowance of contribution towards Area Development Fund. xvi. Disallowance of contribution towards Sakhar Sangh. xvii. Disallowance of vehicle and repair expenditure. Disallowance of carried forward business loss and unabsorbed depreciation.

15. The ld. AR of the assessee submitted that in ITA No. 178/PUN/2012 specific ground was raised against disallowance of SSK Group Cases carried forward business loss and unabsorbed depreciation. However, the Commissioner of Income Tax (Appeals) failed to adjudicate the same.

15.1 We observe that the assessee in appeal before the Commissioner of Income Tax (Appeals) has raised specific ground qua allowability of carried forward losses and unabsorbed depreciation. However, the same was not adjudicate by the Commissioner of Income Tax (Appeals). In the facts of the case we deem it appropriate to restore this issue back to the file of Commissioner of Income Tax (Appeals) to adjudicate the ground raised by the assessee in first appeal.

16. The issue of unabsorbed depreciation and carried forward business loss was also raised in some of the other appeals mentioned in the title. We find that this issue is consequential to the core issues of excessive cane price and sale of sugar at concessional rate. The outcome of the findings on the core issues will have bearing on the allowability of unabsorbed depreciation and carried forward business loss. Consequently, we deem it appropriate to restore this issue back to the file of Assessing Officer for reconsideration along with the core issues mentioned above. Accordingly, the ground of appeal relating to allowability of unabsorbed depreciation and carried forward business loss raised in the appeals is allowed for statistical purpose. Provision for Vasantdada Sugar Institute (VSI) Contribution.

17. The ld. AR submitted that the issue of provision for VSI contribution has been decided by the Tribunal while adjudicating bunch of SSK appeals in Majalgaon SSK Ltd. Vs. ACIT in ITA No. 308/PUN/2018 for assessment year 2013-14 decided on 14-03-2019. SSK Group Cases The Co-ordinate Bench followed the decision rendered in the case of Bhima S.S.K. Ltd. in ITA No. 1414/PUN/2000. The ld. DR fairly admitted that this issue has already been considered by the Tribunal. We observe that the Co-ordinate Bench has decided this issue in favour of assessees by holding as under :

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.

17.1 Thus, in view of the above findings of the Tribunal and submissions made by both the sides, the ground is decided in favour of the assessee. Disallowance of Cane Harvesting and Transportation Expenditure.

18. In some of the appeals, the issue of disallowance of cane harvesting and transportation expenditure incurred by the assessees has been raised. We find that this issue is squarely covered in favour of the assessees by CBDT Circular No. 6/2007, dated 11-10-2007. For the sake of ready reference the same is reproduced here-in-below :

1. Instances have come to the notice of the Board wherein Assessing Officers have disallowed the claim of harvesting and transportation expenses incurred by the Co-operative sugar mills for procuring sugarcane from farmers, who are members of such Co-operative Sugar Mills and who are bound under an agreement to supply the sugarcane exclusively to the concerned sugar Mill.

2. The issue of allowability of such expenses in the case of Co- operative Sugar Mills has been examined by the Board. These expenses are incurred by the Sugar Mills for ensuring an adequate and sustained supply of freshly cut sugarcane that is an essential input for the continuous running of such Mills. These expenses are, therefore; incurred for a commercial expediency and are prima facie wholly and exclusively for the purpose of business. Such expenses are, therefore, allowable in the computation of the income of the Co-operative Sugar Mills.

SSK Group Cases Thus, in view of CBDT Circular (supra) harvesting and transportation expenditure are allowable. Consequently, the issue is decided in favour of the assessees. Disallowance of prior period expenditure.

19. The ld. AR of the assessee submitted that in ITA No. 1726/PUN/2016 for the assessment year 2006-07 (at Sr. No. 28) prior period expenditure has been wrongly mentioned as Rs.1,97,575/- in the grounds of appeal as against Rs.24,294/-. The Commissioner of Income Tax (Appeals) disallowed prior period expenditure on the ground that the assessee has failed to show the period to which these expenses pertain. The ld. AR submitted that if an opportunity is granted, the assessee would furnish necessary documents before the Commissioner of Income Tax (Appeals) in support of his contentions. In view of the prayer made by the assessee, this ground of appeal is restored to the file of Assessing Officer. The assessee shall furnish relevant documentary evidence to support its contentions and the Assessing Officer after considering the same shall decide this issue afresh after affording reasonable opportunity of hearing to the assessee, in accordance with law. Consequently, this ground is allowed for statistical purpose. Sale of bio-compost at concessional rate.

20. The issue of sale of bio-compost at concessional rate emerges from the appeal by the assessee in ITA No. 591/PUN/2014 for the assessment year 2010-11 (at Sr. No. 29). A perusal of the assessment order shows that the assessee has sold bio-compost to its members at a rate less than the cost of production. The assessee incurred an average cost of Rs.800 to Rs.850 pmt. in producing bio-compost and the same is sold to SSK Group Cases members at a rate of Rs.364 to Rs.450 pmt. The assessee has debited loss of Rs.1,27,47,078/- from bio-compost project that has been disallowed by authorities below.

20.1 We observe that this addition is akin to one of the core issues i.e. sale of sugar at concessional rate to the members. Since, we have restored the said issue to the file of Assessing Officer, we deem it appropriate to restore this issue as well to the file of Assessing Officer for deciding it afresh by applying the same principle. Accordingly, this ground of appeal by the assessee is allowed for statistical purpose. Disallowance of advertisement expenditure.

21. Another issue which has emerged in various appeals is disallowance of advertisement expenditure. The assessee has incurred advertisement expenditure in the form of greetings/Shubhecha to various political leaders. The same has been disallowed by the lower authorities on the ground that such advertisement expenditure is not incurred wholly and exclusively for the purpose of business. The ld. AR has placed reliance on the decision of Honble Bombay High Court in the case of Commissioner of Income Tax Vs. Shri Panchganga S.S.K. Ltd. reported as 258 ITR 119 to contend that advertisement expenditure on account of Subhechcha greetings are allowable.

21.1 We have examined the facts with respect to nature of expenditure and have also perused the decision on which the ld. AR has placed reliance. The Tribunal in the case of Commissioner of Income Tax Vs. Shri Panchganga S.S.K. Ltd. (supra) had allowed the advertisement expenditure on account of Subhechcha greetings holding that the SSK Group Cases expenditure was necessary to maintain cordial relations with the members. The Department assailed the findings of Tribunal before the Honble High Court. The Honble High Court upheld the findings of Tribunal by following the earlier decision rendered in the case of Commissioner of Income Tax Vs. Shri Panchganga S.S.K. Ltd. (250 ITR 772) . Since, the issue has already been decided in favour of the assessee by the Honble Jurisdictional High Court, on similar set of facts, the addition upheld by the Commissioner of Income Tax (Appeals) in the present appeals is deleted. Thus, this issue is decided in favour of the assessee. Disallowance of Sabha Samarambh expenses.

22. The expenditure claimed by the assessees under the head Sabha Samarambh are in nature of vehicle charges. The ld. AR submitted that the expenditure is incurred on transportation of numerous SSK shareholders to the events organised by SSK. The expenditure is incurred for spreading goodwill among shareholders and to make shareholders aware of latest development in cultivation of sugarcane. The Assessing Officer has made adhoc disallowance of 10% of such expenditure and the Commissioner of Income Tax (Appeals) has confirmed the same.

22.1 We have examined the impugned order. The assessee in First Appellate proceedings has placed reliance on the decision rendered in the case of Shankar SSK Ltd. Vs. DCIT wherein such expenditure is allowed to the extent of 75%. In the instant case the authorities below in the absence of complete set of documents has disallowed 10% of such expenditure. We are of considered view that disallowance of 10% is fair SSK Group Cases and reasonable. We find no reason to interfere with the impugned findings. Thus, ground of appeal by assessee is dismissed. Disallowance of late payment of Provident Fund.

23. Another issue in some of the appeals is disallowance of contribution towards Provident Fund made after statutory time limit but before the due date of filing return of income. The Ld. Authorised Representatives submitted that admittedly there was delay in deposit of contribution towards Provident Fund but such amount was deposited before due date of filing return of income. This issue has been settled by the Honble Supreme Court of India in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. reported as 319 ITR 306 .

23.1 The assessees eligibility to claim deduction on delayed deposit of employees share in Provident Fund scheme but before due date of filing return of income is no more res integra. The Honble Bombay High Court in the case of Commissioner of Income Tax Vs. Ghatge Patil Transports Ltd. reported as 368 ITR 749 following the ratio laid down in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. (supra) held that deduction to the assessees in respect of statutory payment of Provident Fund is to be allowed only on actual payment before the due date of filing return of income. In the present set of appeals it is not disputed by the Revenue that the contribution was made before the due date of filing return of income. Thus, in view of well settled law and undisputed facts, this issue is decided in favour of the assessees. SSK Group Cases Disallowance of Government Guarantee Fee.

24. Another issue that has emerged in these set of appals is disallowance made u/s. 43B in respect of Government Guarantee Fee not paid by the assessee. The authorities below have held that Government Guarantee Fee is akin to tax, cess or fee and hence, non-payment of same would result in disallowance u/s. 43B of the. Section 43B(a) provides that any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force shall be allowed only when such sum is actually paid. A bare perusal of the above provision would show that tax, duty, cess or fee should flow from the statute. Any other payments payable or paid to the Government which do not fall within the realm of any enactment would not partake the character of tax, duty, cess or fee as envisaged u/s. 43B of the.

24.1 In the present case payments made by the assessees on account of Government Guarantee Fee to the Maharashtra Government are in respect of pre seasonal loans. It is neither emanating from the records, nor the Revenue has brought before us any material to show that the assessee is under obligation to pay Government Guarantee Fee on account of statutory requirement as revenue to the State. The Honble Rajasthan High Court in the case of Commissioner of Income Tax Vs. Udaipur Distillery Co. Ltd. reported as 268 ITR 305 has held that tax, duty, cess or fee constituting a class, denotes various kinds of imposts by State in its sovereign power of taxation to raise revenue for the State. Within the expression of each specie each expression denotes different kind of impost depending on the purpose for which they are levied.

The Honble High Court further clarified that merely levy of charge as tax or SSK Group Cases fee is not conclusive of its character. It is only if any amount becomes payable by way of tax, duty, cess or fee, it falls within the purview of section 43B of the. Thus, in the light of above, we hold that the Government Guarantee Fee cannot be put in same bracket as tax, cess or duty and hence, no disallowance u/s. 43B in respect of non-payment of such fee can be made. Accordingly, this issue is decided in favour of the assessee.

Addition account of contribution towards Chief Minister relief fund.

25. Another issue that is emanating in these group of appeals is disallowance of contribution by assessees towards Chief Minister relief fund. We find that this issue has been considered by Co-ordinate Bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT (supra) and has held as under :

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.

It is an undisputed fact that the issue in present set of appeals is identical. Thus, following the order of Co-ordinate Bench, the issue is restored to the file of Assessing Officer to be adjudicated in similar terms. The issue is allowed for statistical purpose. SSK Group Cases Loan Refund.

26. The assessee in appeal in ITA No. 677/PUN/2014 (at Sr. No. 31) has raised the ground assailing addition of Rs.2,93,43,000/- on account of Loan Refund. A perusal of the assessment order reveal that the Managing Director of the assessee Sahakari Sakhar Karkhana had agreed for the addition. Thereafter, the assessee assailed the said addition before the Commissioner of Income Tax (Appeals). In First Appellate proceedings again the Counsel for the assessee made statement that the assessee does not wish to press this ground of appeal. Once, the ground has not been contested before the First Appellate Authority and the addition has been made on the basis of concession made before the Assessing Officer, the assessee cannot be granted liberty to assail the same addition before the Second Appellate Authority. It is not the case of assessee that the concession was wrongly recorded. We find no reason to interfere with the findings of lower authorities. Accordingly, the addition made on account of loan refund fund is upheld. Disallowance of unpaid professional tax u/s. 43B.

27. One of the ground raised by the Department in its appeal ITA No. 1667/PUN/2016 (at Sr. No. 32) is against deleting of disallowance made by the Assessing Officer in respect of Unpaid Professional Tax u/s. 43B of the. A perusal of impugned order shows that the Commissioner of Income Tax (Appeals) has granted relief to the assessee on the ground that the assessee has not claimed any amount as deduction in respect of Unpaid Professional Tax. If the amount has not been claimed by the assessee as deduction, no disallowance can be made. We do not find any infirmity in the impugned order. Accordingly, the findings of Commissioner of Income Tax (Appeals) on this issue are confirmed. SSK Group Cases Disallowance of VAT.

28. The Revenue in ITA No. 1667/PUN/2016 (at Sr. No. 32) has raised grounds assailing deleting of addition made by the Assessing Officer on account of VAT on Store Material, Bagasse and Molasses. A perusal of impugned order reveal that the Commissioner of Income Tax (Appeals) has allowed part relief to the assessee in respect of above said disallowance after appreciating the facts and examining the books of assessee. The Commissioner of Income Tax (Appeals) has deleted the addition only to the extent of amount that was outstanding in the beginning of year and did not form part of debits to the Profit and Loss Account during the relevant previous year. The ld. DR has failed to controvert the well reasoned findings of Commissioner of Income Tax (Appeals). We find no infirmity in the impugned order in deleting the addition. Accordingly, the findings of Commissioner of Income Tax (Appeals) on this issue are confirmed and the grounds raised by the Revenue in its appeal are dismissed. Disallowance of Khodki charges.

29. Another issue raised in some of the appeals is against disallowance of Khodki charges. The ld. AR for the assessee submitted that this payment was made as per the order of Director of Sugar. The practice of making such payments is prevalent since long. The payments are in nature of compensation. It was further explained that at the time of harvesting, sugarcane is cut by contract labour leaving studs of 6 to 8 inches. Since, payments are made to farmers on the basis of weight the studs left at the time of harvest results in loss of weight. Further, the farmers had to engage extra labour for removing studs. The AO was not satisfied with the explanation offered by the assessee. He noted that the SSK Group Cases Commissioner of Sugar, on behalf of Government of Maharashtra, was issuing directions for payment of Khodki charges only on the proposal sent by the society constituted by SSK owners. 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 reported as 301 ITR 191 (Bom.). Against the findings of Commissioner of Income Tax (Appeals), the Revenue is in appeal before the Tribunal.

29.1 We have heard both the sides and have examined relevant material available on record. It is seen that Khodki charges were paid by the assessees as per the directions of Director of Sugar to compensate the farmers for loss caused by uneven cutting of sugar cane at the time of harvesting. This issue had came up for consideration before the Special Bench of Tribunal in DCIT Vs. Manjara Shetkari SSK Ltd. (2004) 85 TTJ (Mum.)(SB) 369. The Special Bench granted deduction for the aforesaid expenses. On further appeal by the Revenue, the Honble Bombay High Court approved the view taken by the Tribunal in allowing deduction for payment of Khodki Charges. The ld. CIT(A) has recorded 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, this issue has to be decided in favour of the assessee. We hold and direct accordingly. Disallowance of contribution towards Area Development Fund.

30. We find that the Co-ordinate Bench has considered this issue and has restored the same to the file of Assessing Officer by observing as under : SSK Group Cases

13. Having heard both the sides and gone through the relevant material on record, it is seen that similar issue came up for consideration before the Honble Supreme Court in the case of Siddheshwar Sahakari Sakhar Karkhana Limited Vs. CIT and others (2004) 270 ITR 1 (SC) . 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.

30.1 Both sides are unanimous in stating that the issue of disallowance of Area Development Fund in present set of appeals is identical to the one already decided by the Co-ordinate Bench. In the light of directions of Co-ordinate Bench on the issue in hand, the same is restored back to the file of Assessing Officer. The Assessing Officer shall grant reasonable opportunity of hearing to the assessee, in accordance with law. Disallowance of contribution towards Sakhar Sangh.

31. In ITA No. 280/PUN/2017 (at Sr. No. 42) the assessee has assailed addition of Rs.13,35,270/- on account of contribution made to Sakhar Sangh. The contentions of the assessee is that Maharashtra Sakhar Sangh is a federal body of all the sugar factories. The Sangh is rendering various services to all sugar factories such as acting as intermediary for purchase of Gunny bags, making available to sugar factories imported sulphar and other such items required by various sugar factories. The contentions of the assessee is that the contribution to Sakhar Sangh is SSK Group Cases not voluntary but are in accordance with the instructions issued by Commissioner of Sugar, Maharashtra State. The Assessing Officer disallowed assessees claim of deduction u/s. 35(1) in respect of contribution made to Sakhar Sangh. The Commissioner of Income Tax (Appeals) in appellate proceedings restored the issue back to the file of Assessing Officer to verify whether the deduction claimed by the assessee u/s. 35(1) is by virtue of any notification by Central Government, if so the same should be allowed to the assessee. We do not find any infirmity in the directions given by the Commissioner of Income Tax (Appeals) in allowing the claim of assessee u/s. 35(1) subject to verification. We further observe that in view of directions given by the Commissioner of Income Tax (Appeals) the ground raised by the assessee assailing disallowance and adding back of contribution on account of Sakhar Sangh is misconceived. The same is dismissed, accordingly. Disallowance of vehicle and repair expenditure.

32. Another issue raised in the appeal ITA No. 280/PUN/2017 (at Sr. No. 42) by the assessee is against disallowance of vehicle, repair and fuel expenditure. The assessee has claimed expenditure to the tune of Rs.23,84,981/- towards vehicle fuel expenditure. The Assessing Officer in the absence of complete documentary evidence such as logbook, vouchers etc. disallowed 20% of such expenditure. In First Appellate proceedings the Commissioner of Income Tax (Appeals) estimated disallowance to 10% and restricted the addition to Rs.2,38,498/-. The contention of ld. AR of the assessee is that the books of account of assessee are duly audited and Assessing Officer has not rejected the same, therefore, no disallowance should be made. The expenditure has SSK Group Cases been made exclusively for the purpose of business. After examining the impugned order and taking into consideration the submissions of assessee, we hold that in the absence proper supporting vouchers/record and complete details of expenditure, some disallowance has to be made. To meet the ends of justice it would be fair and reasonable to restrict the disallowance to 5% of total expenditure claimed under the impugned head. We hold and direct accordingly. The ground is partly allowed in the terms aforesaid.

33. In the result, the appeals of assessees and the Department are partly allowed for statistical purpose. Order pronounced on Thursday, the 13 th day of June, 2019. Sd/- Sd/- (. /D. Karunakara Rao) ( / Vikas Awasthy) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / Pune; / Dated : 13 th June, 2019. RK / Copy of the Order forwarded to :

1. / The Appellant.

2. / The Respondent.

3. () / The CIT(A) concerned

4. / The CIT concerned

5. , , , / DR, ITAT, B Bench, Pune.

6. / Guard File. // // True Copy// / BY ORDER, / Private Secretary, , / ITAT, Pune