M/s. Sundalpura Dudh Utpadak Sahakari Mandli Ltd., Umreth V. ITO, Ward-2, , Aanad

ITA 175/AHD/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 7970 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-10-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 18-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K GOYAL
• Assessee Lawyers: PRANALI THAKAR
• Section: 142(1); 143(2); 44AB; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 175/AHD/2018 (ASSESSMENT YEAR: 2013-14) M/S SUNDALPURA DUDH UTPADAK SAHAKARI MANDLI LTD. AT: SUNDALPURA TAL: UMRETH-388210 V/S ITO WARD-2, ANAND (APPELLANT) (RESPONDENT) PAN: AAALS0459B APPELLANT BY : SMT. PRANALI THAKAR , AR RESPONDENT BY : SHRI N. K. GOYAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 17 -10-201 9 DATE OF PRONOUNCEMENT : 19 -12-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-4, VADODARA DATED 07.09.2017 PERTAINING TO A.Y. 2013-14 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO.175/A HD/2018 . A.Y.2013-14 2 1.THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS BY MAKING ADDITION AMOUNTING TO RS. 9,11,780/- BY DISALLOWING THE CLAIM U/S 80P(2)(B) O F THE I.T. ACT, 1961 AND THE LD. CIT(A) HAS ALSO ERRED IN LAW AS WELL AS ON FACTS BY CONFIRMING THE ADDITIONS. 2.THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS BY NOT PROPERLY INTERPRETING THE SECTION IN REAL SENSE OF LAW UNDER WHICH THE DEDUCT ION HAS BEEN CLAIMED BY THE APPELLANT ASSESSEE AND MADE THE ADDITIONS OFRS.9,11,780/- BY DISALLOWING THE DEDUCTION CLAIMED U/S 80P(2)(B) AND RAISING THE DEMAND OF RS. 3,78,980/-. 3.THE APPELLANT PRAYS FOR GRANT OF LEAVE FOR ADDITI ON, ALTERATION, AMENDMENT OR WITHDRAWAL OF ANY OF THE GROUNDS OF APPEAL PREFERRED, DURING THE COUR SE OF HEARING OF THIS APPEAL. 2. FACTS OF THE CASE ARE THAT THE APPELLANT IS A PRIMAR Y CO-OPERATIVE SOCIETY ENGAGED IN THE ACTIVITY OF SUPPLYING MILK TO THE FEDERAL CO-OP ERATIVE SOCIETY I.E. AMUL IN THE NAME OF STILE M/S SUNDALPURAPURA DUDH UTPADAK SAHAK ARI MANDLI LTD.. THE APPELLANT CO-OPERATIVE SOCIETY MAINTAINS BOOKS OF AC COUNT REGULARLY ON MERCANTILE BASIS. THE SAME ARE AUDITED U/S. 44AB AND THE AUDIT REPORT HAVE ALREADY BEEN PRODUCED AND SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS. THE APPELLANT HAD FURNISHED HIS RETURN OF INCOME FOR A.Y. 2013-14 DECLARING THE TOTAL INCOME AT RS. NIL THEREIN . THE APPELLANTS CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICE U/S. 142(1) AND 143(2) WAS DULY SERVED UPON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICES THE APPELLANT CO-OPERATIVE ASSESSEE THROUGH ITS AUTHORIZED REPRESENTATIVE SUBM ITTED THE DETAILS CALLED FOR. 3. HOWEVER THE ASSESSING OFFICER FINALIZED THE SCRUTIN Y ASSESSMENT AFTER MAKING HEAVY ADDITIONS. HE MADE ADDITION AMOUNTING TO RS. 9,11,78 0/- I.E. OUT OF THE TOTAL DEDUCTION CLAIMED OF RS. 9,61,776/-, RS. 50,000/- WA S ALLOWED AS DEDUCTION U/S. 80P(2)(C)(II) AND BALANCE AMOUNT OF RS. 9,11,780/- WAS ADDED TO ITS TOTAL INCOME AND RAISED THE DEMAND OF RS. 3,78,980/-. 4. THE APPELLANT PREFERRED APPEAL BEFORE THE LD. CIT(A ), VADODARA. HOWEVER THE LD CIT(A) CONFIRMED THE ADDITIONSOF RS. 9,11,780/-. ITA NO.175/A HD/2018 . A.Y.2013-14 3 5. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE PREFE RRED SECOND STATUTORY APPEAL BEFORE US. 6. NOW ASSESSEE HAS COME BEFORE US. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGNE D ORDER. THE ASSESSEE IS A PRIMARY CO-OPERATIVE SOCIETY ESTABLISHED 48 YEARS AG O AND IT IS ENGAGED IN THE ACTIVITIES OF COLLECTING MILK FROM ITS INDIVIDUAL ME MBERS AND TO SUPPLY THE MILK COLLECTED, TO A FEDERAL CO-OPERATIVE SOCIETY NAMED KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD. (FORMERLY KNOWN AS AMUL). THE FORMATION OF THE APPELLANT PRIMARY CO-OPERTIVE SOCIETY WAS MADE BY GROUP OF INDI VIDUAL MILK PRODUCER PERSONS, WHO WERE PRODUCING MILK AND CONTRIBUTING THE SAME I NTO THE COMMON POOL OF THE CO-OPERATIVE SOCIETY FOR ONWARD SUPPLYING THE SAME TO AMUL. THE REGISTRAR OF CO- OPERATIVE SOCIETY HAS APPROVED THE SAME AS PRIMARY CO -OPERATIVE SOCIETY UNDER THE ACT AND GRANTED THE CERTIFICATE AND SAME IS PART OF PAPER BOOK AT PAGE NO. 40. 8. SECTION 80P(2)(B) STATES WHERE DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES. IN THE CASE OF CO-OPERATIVE SOCIETY, BE ING A PRIMARY SOCIETY ENGAGED IN SUPPLYING MILK, OIL SEEDS, FRUITS OR VEGETABLES RAI SED OR GROWN BY ITS MEMBERS. 9. IN THIS CASE, INDIVIDUAL MEMBERS ARE PRODUCING MILK A ND SUPPLYING TO A CO-OPERATIVE SOCIETY. 10. IN SUPPORT OF ITS CONTENTION, LD. A.R. CITED A JUDG MENT IN THE MATTER OF KERALA STATE CO-OPERATIVE MARKETING FEDERATION LTD. & ORS. VS. C IT WHEREIN RELIEF WAS GRANTED TO A SOCIETY WHICH WAS ENGAGED IN THE SIMILAR ACTIVITIE S WITH FOLLOWING OBSERVATION: NO. 506 OF 1994, FILED BY THE KERALA STATE COOPERAT IVE MARKETING FEDERATION LIMITED AND APPLY THE RESULT THERETO IN OTHER MATTERS. THE SOCI ETY IN QUESTION IS REGISTERED UNDER THE KERALA COOPERATIVE SOCIETIES ACT AND IS AN ASSESSEE UNDER THE INCOME-TAX ACT. ... THE CLASSES OF SOCIETIES COVERED BY SECTION SOP OF THE ACT ARE AS FOLLOWS: (A) ENGAGED IN ITA NO.175/A HD/2018 . A.Y.2013-14 4 BUSINESS OF BANKING AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS; (B) ENGAGED IN COTTAGE INDUSTRY; (C) SOCIETY ENGAGED IN MARKETING AGRICULT URAL PRODUCE OF ITS MEMBERS; (D) ENGAGED IN PURCHASE OF AGRICULTURAL IMPLEMENTS, SEE DS, LIVESTOCK OR OTHER ARTICLES INTENDED FOR AGRICULTURE FOR THE PURPOSE OF SUPPLYI NG THEM TO ITS MEMBERS; (E) A SOCIETY ENGAGED IN THE PROCESSING, WITHOUT THE AID OF POWER , OF THE AGRICULTURAL PRODUCE OF ITS MEMBERS; OR (F) A PRIMARY SOCIETY ENGAGED IN SUPPLY ING MILK RAISED BY ITS MEMBERS TO A FEDERAL MILK CO-OPERATIVE SOCIETY. 11. AND IN A RECENT ORDER OF ITAT COCHIN BENCH HAS DELI VERED THE FOLLOWING JUDGMENT IN FAVOUR OF ASSESSEE IN THE MATTER OF ITO VS. CREDI T SOCIETY LTD. DATED 29.08.2018 WITH FOLLOWING OBSERVATION: M/S.SAHYADRI CO-OP CREDIT SOCIETY LTD. MARKETING O F AGRICULTURAL PRODUCE GROWN BY ITS MEMBERS, OR (IV) THE PURCHASE OF AGRICULTURAL IMPLE MENTS, SEEDS, LIVESTOCK OR OTHER ARTICLES INTENDED FOR AGRICULTURE FOR THE PURPOSE O F SUPPLYING THEM TO ITS MEMBERS, OR (V) THE PROCESSING, WITHOUT THE AID OF POWER, OF THE AG RICULTURAL PRODUCE OF ITS MEMBERS, OR (VI) THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS M EMBERS, OR (VII) FISHING OR ALLIED ACTIVITIES, THAT IS TO SAY, THE CATCHING, CURING, PROCESSING, P RESERVING, STORING OR MARKETING OFFISH OR THE PURCHASE OF MATERIALS AND EQUIPMENT IN CONNECTI ON THEREWITH FOR THE PURPOSE OF SUPPLYING THEM TO ITS MEMBERS, THE WHOLE OF THE AMO UNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES : PROVIDED THAT IN THE CASE OF A CO- OPERATIVE SOCIETY FALLING UNDER SUB-CLAUSE (VI), OR SUB-CLAUSE (VII), THE RULES AND BYE-LAWS OF THE SOCIETY RESTRICT THE VOTING RIGHTS TO THE FO LLOWING CLASSES OF ITS MEMBERS, NAMELY: (1) THE INDIVIDUALS WHO CONTRIBUTE THEIR LABOUR OR, AS THE CASE MAY BE, CARRY ON THE FISHING OR ALLIED ACTIVITIES; (2) THE CO-OPERATIVE CREDIT SOCI ETIES WHICH PROVIDE FINANCIAL ASSISTANCE TO THE SOCIETY; (3) THE STATE GOVERNMENT; (B) IN THE C ASE OF A CO- OPERATIVE SOCIETY, BEING A PRIMARY SOCIETY ENGAGED IN SUPPLYING MILK, OILSEEDS , FRUITS OR VEGETABLES RAISED OR GROWN BY ITS MEMBERS TO (I) A FEDERAL CO- OPERATIVE SOCIE TY, BEING A SOCIETY ENGAGED IN THE BUSINESS OF SUPPLYING MILK, OILSEEDS, FRUITS, OR VE GETABLES, AS THE CASE MAY BE; OR (II) THE GOVERNMENT OR A LOCAL AUTHORITY; OR (III) A GOVERNM ENT COMPANY AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956), OR A CORPOR ATION ESTABLISHED BY OR UNDER A CENTRAL, STATE OR PROVINCIAL ACT (BEING A COMPANY O R CORPORATION ENGAGED IN SUPPLYING MILK, OILSEEDS, FRUITS OR VEGETABLES, AS THE CASE M AY BE, TO THE PUBLIC), THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF SUCH BUSINESS; (C) I N THE CASE OF A CO- OPERATIVE SOCIETY ENGAGED IN ACTIVITIES OTHER THAN THOSE SPECIFIED IN CLAUSE (A) OR CLAUSE (B) (EITHER INDEPENDENTLY OF, OR IN ADDITION TO, ALL OR ANY OF THE ACTIVITIES SO SPECIFIED), SO MUCH OF ITS PROFITS AND 5 ITA NOS.152-153/C/2018. ... SECTION 8 0P(4) IS REPRODUCED HEREUNDER: (4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN R ELATION TO ANY COOPERATIVE BANK OTHER THAN A PRIMARY 6 ITA NOS.152-153/C/2018. ... HENCE THE QUESTION BOILS DOWN TO WHETHER ASSESSEE COULD BE CONSIDERED AS A COOPERATIVE BANK. ITA NO.175/A HD/2018 . A.Y.2013-14 5 12. RESPECTFULLY FOLLOWING THE SUPREME COURT JUDGMENT AN D IN PARITY WITH THE AFORESAID ITAT ORDER, WE ALLOW THE APPEAL OF THE ASSESSEE. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 12- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 19/12/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD