M/s.Nileshwar Range Kallu Chethu Vyavasaya Thozhilali Sahakarana sangham, Kasargode V. The ITO, Kasargode

ITA 268/COCH/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5513 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A DHANARAJ

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI P. K. BANSAL, VICE PRESIDENT AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO S.268 & 269/COCH/2015 ASSESSMENT YEAR:2009-10 INCOME TAX OFFICER, WARD-1, KASARGOD. VS M/S NILESHWAR RANGE KALLU CHETHU VYAVASAYA THOZHILALI SAHKARANA SANGAM, NILESHWAR. PAN:AAAAN 8969 J (RESPONDENT) (APPELLANT) SHRI ARUN RAJ S, ADVOCATE APPELLANT BY SHRI A. DHANARAJ, SR. D. R. RESPONDENT BY 26/09/2017 DATE OF HEARING 26 /09/2017 DATE OF PRONOUNCEMENT ORDER PER P. K. BANSAL, V.P. IN BOTH THESE APPEALS FILED BY THE ASSESSEE, THE I SSUE INVOLVED RELATES TO THE CLAIM OF DEDUCTION BY THE ASSESSEE U NDER SECTION 80P(2)(A)(VI) OF THE ACT. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY C ONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES B ELOW. WE NOTED AS PER THE COPY OF THE DECISION FILED BY LEARNED D. R. THAT THE IMPUGNED ISSUE WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTIO N UNDER SECTION 80P(2)(A)(VI) OF THE ACT HAS BEEN DECIDED BY THE HO N'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE ASSESSEE FOR THE ASSE SSMENT YEAR 2008-09 AND 2009-10 AS REPORTED IN 380 ITR 34 AGAINST THE A SSESSEE. WE HAVE 2 GONE THROUGH THE SAID DECISION AND NOTED THAT WHEN THE SIMILAR ISSUE IN THE ASSESSMENT YEAR 2008-09 AND 2009-10 TRAVELLED T O HON'BLE HIGH COURT, HON'BLE HIGH COURT HELD AS UNDER: 13. WE HAVE ALSO GONE THROUGH THE BYE-LAWS OF THE SOCIETY. THE FACTUAL FINDINGS OF THE ASSESSING OFFI CER, WHICH WAS CONFIRMED BY THE APPELLATE TRIBUNAL SHOW THAT T HOUGH MEMBERSHIP OF THE SOCIETY IS CONFINED TO PERSONS WH O ARE ENROLLED AS THE MEMBERS OF THE TODDY WORKERS WELFAR E FUND BOARD AND ARE TODDY TAPERS, FOR THE TODDY THAT ARE TAPPED AND DELIVERED BY THEM TO THE SOCIETY, THEY A RE PAID REMUNERATION BASED ON THE QUANTITY OF TODDY DELIVER ED. ON SIMILAR TERMS, TODDY IS COLLECTED FROM THE NON-MEMB ERS ALSO. THE BYE-LAWS OF THE SOCIETY SHOWS THAT THE MA IN OBJECT OF THE SOCIETY IS ESTABLISHMENT AND MANAGEME NT OF THE TODDY SHOPS. THE ACTIVITY OF THE SOCIETY IS, TH EREFORE, PURCHASE OF TODDY FROM ITS MEMBERS AND NON- MEMBERS ON PAYMENT OF THE AGREED REMUNERATION AND ITS SALE THR OUGH THE TODDY SHOPS ESTABLISHED BY THE SOCIETY ITSELF. 14. THIS, THEREFORE, SHOWS THAT THE COLLECTIVE DISP OSAL OF THE LABOUR OF THE MEMBERS OF THE SOCIETY IS NOT RESULTI NG IN THE GENERATION OF ANY INCOME TO THE SOCIETY. ON THE OTH ER HAND, TODDY TAPPED AND DELIVERED BY THE MEMBERS OF THE SO CIETY AND NON-MEMBERS ARE PURCHASED BY IT AND REMUNERATIO N IS PAID TO THEM AT AGREED RATES. THE TODDY THUS PURCHA SED IS SOLD THROUGH THE TODDY SHOPS ESTABLISHED BY THE SOC IETY. THEREFORE, THE INCOME OF THE SOCIETY HAS NOTHING TO DO WITH THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS MEMBER S BUT IS ENTIRELY FROM OUT OF THE PRICE REALISED BY IT FOR T HE SALE OF TODDY THROUGH THE SOCIETY'S OWN TODDY SHOPS. WHEN T HAT IS THE ACTIVITY OF THE SOCIETY, IT CANNOT BE SAID THAT THE SUM REFERRED TO IN SECTION 80P(1) ENTITLING THE SOCIETY FOR DEDUCTION IS GENERATED OUT OF THE COLLECTIVE DISPOS AL OF THE LABOUR OF THE APPELLANT-SOCIETIES. 15. THE SOCIETY DOES NOT DISPUTE THE CORRECTNESS OF THE FACTUAL FINDING THAT TODDY IS COLLECTED FROM NON-ME MBERS ALSO. THOUGH THIS WAS ATTEMPTED TO BE EXPLAINED BY THE LEARNED COUNSEL BY POINTING OUT THAT THERE ARE PERS ONS WHO SUPPLIED TODDY TILL THEY BECAME ELIGIBLE FOR ADMISS ION TO THE TODDY WORKERS WELFARE FUND BOARD, THE FACT THAT AT LEAST 3 UNTIL THEN, THE SUPPLIERS OF TODDY ARE NON-MEMBERS OF THE SOCIETIES, REMAIN UNDISPUTED. HOWEVER, EVEN IF THIS CONTENTION OF THE REVENUE IS ACCEPTED, THE SOCIETIE S WOULD NOT BE TOTALLY DEPRIVED OF THE BENEFIT OF DEDUCTION BUT WOULD HAVE BEEN ENTITLED TO PROPORTIONATE DEDUCTION . 16. FOR THE AFORESAID REASONS, THE TRIBUNAL IS FULL Y JUSTIFIED IN HOLDING THAT THE APPELLANT-SOCIETIES ARE NOT ELI GIBLE FOR THE BENEFIT OF SECTION 80P(2)(A)(VI) OF THE ACT. 3. RESPECTFULLY FOLLOWING THE SAID DECISION OF HON' BLE HIGH COURT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND 2009-10, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER O F THE CIT(A) DENYING THE DEDUCTION TO THE ASSESSEE UNDER SECTION 80P(2)(A)(V I) OF THE ACT. WE, THEREFORE, CONFIRM THE ORDER OF CIT(A) DISMISSING T HE APPEAL OF THE ASSESSEE IN BOTH THE ASSESSMENT YEARS. 4. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE STAND DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 26/09/2017) SD/. SD/. (GEORGE GEORGE K.) (P. K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT DATED:26/09/2017 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5. D.R., I.T.A.T., COCHIN ASS TT. REGISTRAR