Bardhaman Co-Operative Milk Producer Union Ltd., Burdwan V. ACIT, CIR-1, Burdwan, Burdwan

ITA 1841/KOL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3415 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 26-09-2014
• Court: TRIBUNAL
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: K OLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.1841/KOL/2014 ASSESSMENT YEAR: 2007-08 BARDHAMAN CO-OPERATIVE MILK PRODUCERS VS. ASSIS TANT COMMISSIONER OF INCOME-TAX, UNION LTD. (PAN: AAABB0221C) CIRCLE-1, BURDWAN ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 08.12.2015 DATE OF PRONOUNCEMENT: 20.01.2016 FOR THE APPELLANT: SHRI SOUMITRA CHOWDHURY, ADVOCA TE FOR THE RESPONDENT: SHRI TANUJ NIYOGI, JCIT, SR. DR ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), DURGAPUR VIDE APPEAL NO. 98/ASL/ACIT/CIR-1/BWN/2009-10 DATED 03.03.2014. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-1, BURDWAN U/S. 147/143(3) OF THE INCO ME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007- 08 VIDE HIS ORDER DATED 24.12.2009. 2. THIS APPEAL OF ASSESSEE IS TIME BARRED BY 96 DAY S AND ASSESSEE HAS FILED CONDONATION PETITION STATING THAT THE ASSESSEES EA RLIER COUNSEL SHRI PRADIP AICH, ADVOCATE WHO WAS LOOKING AFTER TAXATION MATTER BEFO RE AO AND CIT(A) COULD NOT ADVICE PROPERLY TO FILE APPEAL BEFORE TRIBUNAL. HE DREW MY ATTENTION TO THE FOLLOWING PARAS OF THE CONDONATION PETITION: THAT AS SOON AS THE ORDER WAS RECEIVED BY THE ASS ESSEE I.E. COOPERATIVE SOCIETY, THEY HAD APPROACHED THE SAID LAWYER, SHRI PRADIP AICH ENQUIR ING FOR FURTHER STEPS TO BE TAKEN IN THE MATTER. THE SAID LAWYER IS NOT VERY CONVERSANT WITH THE TRIBUNAL MATTERS, THEREFORE, HE HAS NOT ADVISED US TO FILE APPEAL BEFORE THE HON BLE TRIBUNAL AGAINST THE ORDER PASSED BY THE LD. CIT(A). THAT THE SOCIETY HAS APPROACHED SRI SOUMITRA CHOUD HURY, ADVOCATE ON 18 TH SEPTEMBER FOR SOME OTHER TAXATION MATTER WHO HAS ADVISED US T O FILE THE APPEAL IMMEDIATELY ALONG WITH A DELAY CONDONATION PETITION. THAT AS SOON AS THIS ADVICE IS GIVEN TO US, WE HAVE DISCUSSED THE MATTER IN OUR BOARD AND ASKED THE SAID LAWYER TO PREPARE OUR APPEAL IMMEDIA TELY AND HE HAS PREPARED THE APPEAL IMMEDIATELY WHICH IS FILED TO-DAY. 3. WHEN THESE WERE CONFRONTED TO LD. SR. DR, HE FAI RLY STATED THAT THE DELAY CAN BE CONDONED AND APPEAL CAN BE ADMITTED. IN VIEW OF TH E ABOVE, I CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 2 ITA NO.1841/K/2014 MBARDHAMAN COOP. MILK PRODUCERS UNION LTD. AY 2007-0 8 4. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S. 80P(2 ) OF THE ACT AMOUNTING TO RS.5,54,842/-. 5. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE CO-OP ERATIVE SOCIETY IS A CENTRAL/APEX/FEDERAL CO-OPERATIVE MILS PRODUCERS' U NION WITHIN THE AREA OF BURDWAN DISTRICT AND WAS REGISTERED WITH THE ADDITIONAL REG ISTRAR OF CO-OPERATIVE SOCIETIES, WEST BENGAL ON 10.06.1993. ACCORDING TO ITS BYE-LAW S, THE ASSESSEE-SOCIETY'S MAIN OBJECTIVE IS TO CARRY OUT ACTIVITIES CONDUCIVE TO T HE ECONOMIC AND SOCIO-ECONOMIC DEVELOPMENT OF THE MILK PRODUCERS BY ORGANIZING EFF ECTIVE PRODUCTION, PROCESSING AND MARKETING OF COMMODITIES. FURTHER, ACCORDING TO ITS BY-LAWS, ONLY ANY REGISTERED PRIMARY MILK PRODUCERS' CO-OPERATIVE SOCIETY UNDER THE JURISDICTION OF THE UNION (THE ASSESSEE) AND SUPPLYING MILK TO THE UNION (THE ASSE SSEE) IS ENTITLED TO HOLD ITS MEMBERSHIP. IN OTHER WORDS AND AS MENTIONED IN THE AUDIT REPORT OF THE ASSESSEE-SOCIETY, PRIMARY MILK PRODUCERS' CO-OPERATIVE SOCIETIES ARE AFFILIATED TO THE ASSESSEE-SOCIETY WHICH IS A CENTRAL/FEDERAL SOCIETY. IT IS FURTHER M ENTIONED IN THE SAID AUDIT REPORT THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, EIG HT NEW SOCIETIES WERE REGISTERED AND AFFILIATED TO THIS CENTRAL SOCIETY. THE MANAGEMENT OF THE SOCIETY WAS VESTED ON A BOARD OF DIRECTORS CONSISTING OF NOMINEES FROM THE PRIMAR Y SOCIETIES ORGANIZED BY IT DURING THE YEAR. THE ASSESSEE-SOCIETY COLLECTS MILK FROM I TS MEMBERS, I.E. THE PRIMARY MILK PRODUCERS' CO-OPERATIVE SOCIETIES (WHO COLLECT THE SAME FROM THE FARMERS) AND SUPPLIES THE SAME TO DIFFERENT CONCERNS IN THE STATE. THE PA YMENTS COLLECTED BY THE ASSESSEE- SOCIETY FROM THESE CONCERNS ARE THEN CHANNELIZED TO THE MEMBER PRIMARY SOCIETIES AND ULTIMATELY TO THE FARMERS. IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE FOLLOWING DEDUCTIONS WERE CLAIME D FROM THE NET PROFIT OF RS.15,89,455/- IN COMPUTING THE NET INCOME FROM BUS INESS AS PER P/L ACCOUNT :- I) INTEREST RECEIVED FROM BCBB LTD. U/S. 80P(2)(D) . RS. 9,90,224 II) PROFIT FROM BUSINESS U/S. 80P(2)(B) OF THE ACT .. RS. 5,99,231 RS.15,89,455 ACCORDINGLY, ASSESSEE DECLARED NET PROFIT FROM BUSI NESS AS NIL. THE AO HELD THE INCOME FROM INTEREST AMOUNTING TO RS.9,90,224/- AS ELIGIB LE FOR DEDUCTION UNDER CLAUSE (D) OF SEC. 80P(2) OF THE ACT. HE, HOWEVER, DISALLOWED THE DEDUCTION OF RS.5,99,231/- CLAIMED U/S. 80P(2)(B) OF THE ACT. BEFORE DOING SO, THE A.O . ASKED THE ASSESSEE TO EXPLAIN AS TO WHY DEDUCTION CLAIMED U/S. 80P(2)(B) OF THE ACT SHO ULD NOT BE DISALLOWED IN RESPECT OF 3 ITA NO.1841/K/2014 MBARDHAMAN COOP. MILK PRODUCERS UNION LTD. AY 2007-0 8 INCOME FROM SUPPLYING/TRADING OF MILK AND COW-FEED AMOUNTING TO RS.5,99,231/-. IN REPLY, THE ASSESSEE RELYING UPON THE DECISIONS IN T HE CASES OF (A) CIT VS. TAMIL NADU CO- OPERATIVE MARKETING FEDERATION LTD. (1983) 144 ITR 74 (MAD) AND (B) KERALA STATE CO- OPERATIVE MARKETING FEDERATION LTD. VS. CIT (1988) 231 ITR, 814, 825 (SC) HAS STATED THAT THE ASSESSEE-SOCIETY IS ENTITLED FOR DEDUCTION U/S. 80P(2)(B) OF THE ACT. AFTER GOING THROUGH THE ABOVE COURT DECISIONS AND THE FACTS OF THE ASSESSEE-SOCIETY'S CASE, THE AO HELD THAT THE RATIO OF THE ABOVE DECISIONS IS NOT S QUARELY APPLICABLE TO THE INSTANT CLAIM SINCE THE ASSESSEE-SOCIETY IS A CENTRAL/FEDERAL CO- OPERATIVE SOCIETY AND NOT A PRIMARY SOCIETY LIKE ITS MEMBERS. THE CIT(A) ALSO CONFIRM ED THE ACTION OF AO ON SAME REASONINGS. AGGRIEVED, ASSESSEE PREFERRED SECOND A PPEAL BEFORE TRIBUNAL. 6. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US LD. COUNSEL FOR THE ASSESSEE SHRI SOUMITRA CHOWDHURY, ADVOCATE ARGUED ON THE ISSUE OF CONSISTENCY FOR THE REASON T HAT REVENUE IN AY 2003-04 AND 2004- 05 HAS ALREADY ALLOWED THE CLAIM OF DECUCTION U/S. 80P(2)(B)(I) OF THE ACT WHILE FRAMING ASSESSMENT U/S. 143(3) OF THE ACT IN BOTH THE YEARS . EVEN OTHERWISE LD. COUNSEL FOR THE ASSESSEE IN VIEW OF THE ABOVE GIVEN FACTS ARGUED TH AT THE ISSUE IS COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KERALA STAT E COOPERATIVE MARKETING FEDERATION LTD. VS. CIT (1988) 231 ITR 814 (SC), WHEREIN HONB LE SUPREME COURT HAS DISCUSSED THE ISSUE OF APEX COOPERATIVE SOCIETY AS WELL AS PR IMARY COOPERATIVE SOCIETY AS UNDER: IT WAS HELD THAT THIS DEDUCTION WAS ALSO AVAILABL E TO AN APEX SOCIETY WHERE THE MEMBERS WERE COOPERATIVE SOCIETIES AND IT DID NOT MATTER IF THEY WERE NOT AGRICULTURISTS THEMSELVES BUT PURCHASE FROM AGRICULTURISTS. IT IS ALSO THE S ETTLED POSITION OF LAW THAT, WHERE A FEDERAL COOPEATIVE SOCIETY, A LOCAL AUTHORITY, A PU BLIC SECTOR, COMPANY OR A GOVT. COLLECTS MILK OR OIL SEEDS, FRUITS AND VEGETABLES FROM A PRI MARY COOPERATIVE SOCIETY FOR DISTRIBUTION TO THE PUBLIC, THE WHOLE INCOME OF THE PRIMARY SOCIETY IS EXEMPT U/S. 80P(2)(B) OF INCOME TAX ACT. IT MEANS THAT THE EXE MPT U/S. 80P(2)(B) OF THE ACT IS AVAILABLE AT EVERY LAYERTO THE BASIC SOCIETIES AS ALSO TO AN UNION (APEX SOCIETY) OF WHICH THE MEMBERS ARE THE PRIMARY COOPERATIVE SOCIE TIES. I FIND FROM THE ABOVE FACTS THAT THE ISSUE IS COVER ED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KERALA STATE COOPERATIVE MARKE TING FEDERATION LTD., SUPRA AND RESPECTFULLY FOLLOWING THE SAME, I ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.01.2 016 SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 20 TH JANUARY, 2016 4 ITA NO.1841/K/2014 MBARDHAMAN COOP. MILK PRODUCERS UNION LTD. AY 2007-0 8 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT BARDHAMAN COOPERATIVE MILK PRODUCER S UNION LTD., SAILESH BANERJEE ROAD, SRIPALLYM, BURDWAN-713 103 2 RESPONDENT ACIT, CIRCLE-1, BURDWAN. 3. THE CIT(A), DURGAPUR 4. 5. CIT , DURGAPUR DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .