Commissioner Of Income Tax vs Tasgaon Taluka S.S.K. Ltd.

Whether sugarcane purchase price paid by a cooperative society to growers above the Statutory Minimum Price (SMP) under Clause 3 of the Sugar Cane (Control) Order, 1966, and as per State Advised Price (SAP) under Clause 5A, constitutes sharing of profit and is thus not allowable as business expenditure under Section 37 of the Income Tax Act, 1961 --- Held No. Whether any amount paid above/beyond the price determined under Clauses 3 & 5A of the Control Order, 1966, if found unreasonable and in excess of fair market value, can be disallowed under Section 40A(2) of the Income Tax Act, 1961 --- Held Yes, but subject to factual verification.