Aslali Seva Sahkari Mandali Ltd., Ahmedabad V. The Income Tax Officer, Ward-7(1), Ahmedabad

ITA 965/AHD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9882 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM & SHRI MANISH BORAD , AM. ITA NO.965/AHD/2014 ASST. YEAR: 2009-10 ASLALI SEVA SAHKARI MANDALI LTD., ASLALI, TAL.DASCROI, DIST. AHMEDABAD. VS. ITO, WD-7(1), AHMEDABAD. APPELLANT RESPONDENT PAN AAABA 0115G APPELLANT BY SHRI TUSHAR HEMANI, AR RESPONDENT BY SHRI PRASOON KABRA, SR.DR DATE OF HEARING: 24/11/2016 DATE OF PRONOUNCEMENT: 30/11/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF ASSESSEE FOR ASST. YEAR 2009-10 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) XIV, AHMEDABAD, DA TED 11.11.2013 IN APPEAL NO.CIT(A)-XIV/WD-7(1)/165/2011-12 ARISING OUT OF ORDER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE AC T) FRAMED ON 28.11.2011 BY ITO, WD-7(1), AHMEDABAD. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE F ACTS OF THE CASE IN CONFIRMING THE ACTION OF ID. AO IN DENYING CLAIM OF DEDUCTION U/S 80P(2)(E) OF THE INCOME TAX ACT,1961 ('THE ACT' ) ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 2 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE F ACTS OF THE CASE IN HOLDING THAT WHEN THERE IS NO PROFIT OR GAIN, CL AIM OF DEDUCTION U/S 80P(2)(E) OF THE ACT IS NOT ALLOWABLE WITHOUT A PPRECIATING THAT THE APPELLANT HAS POSITIVE INCOME WHICH WAS ELIGIBL E FOR SUCH CLAIM OF DEDUCTION U/S 80P OF THE ACT. 3. BOTH THE LOWER AUTHORITIES HAVE PASSED THE ORDER S WITHOUT PROPERLY APPRECIATING THE FACT AND THAT THEY FURTHE R ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IM PUGNED ORDER. 4. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF ID. AO IN CHARGING INTEREST U/S 234A/B/C/ D OF THE ACT. 5. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF ID. AO IN INITIATING PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, ED IT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEA L AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A CO-O P. SOCIETY ENGAGED IN THE ACTIVITIES OF PROVIDING CREDIT FACIL ITIES TO ITS MEMBERS AND ALSO RUNNING VARIOUS GODOWNS FOR STORING VARIOU S COMMODITIES. THE RETURN OF INCOME WAS FILED ON 14.09.2009 DECLAR ING NIL INCOME. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT THROU GH CASS. NOTICE U/S 143(2) OF THE ACT WAS ISSUED FOLLOWED BY NOTICE U/S 142(1) OF THE ACT, WHICH WERE DULY SERVED ON THE ASSESSEE. NECESSARY DETAILS WERE FURNISHED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS. LD. ASSESSING OFFICER DENIED DEDUCTION U/S 80P(2)(E ) OF THE ACT ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 3 TOWARDS INCOME FROM LETTING OUT GODOWNS ON RENT BY TAKING A VIEW THAT SAME WAS NOT EARNED THROUGH ITS MEMBERS. LD. A SSESSING OFFICER ALSO DISALLOWED NOTIONAL INCOME OF RS.40,00 0/- U/S 24(B) OF THE ACT. INCOME WAS ASSESSED AT RS.7,50,203/-. 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CI T(A). LD. CIT(A) DELETED THE ADDITION OF RS.40,000/- U/S 24(B ) OF THE ACT. 4. AS FAR AS GROUND OF ASSESSEE TOWARDS CLAIM OF DE DUCTION U/S 80P(2)(E) OF THE ACT, LD. CIT(A) ALLOWED THE GROUND OF ASSESSEE TO THE EXTENT THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(E) TOWARDS INCOME OF LETTING OUT GODOWNS/WAREHOUSES FOR STORAG E, PROCESSING OR FACILITATING MARKETING COMMODITIES WHETHER GIVEN TO MEMBERS OR NON- MEMBERS. HOWEVER, LD. CIT(A) ERRED IN NOT PROPERLY ADJUDICATING THE GROUND BY OBSERVING THAT AS THERE IS NO NET PROFIT OR GAIN I.E. POSITIVE INCOME AFTER ALLOWANCE U/S 80P OF THE ACT, THEN NO SUCH DEDUCTION U/S 80P(2)(E) OF THE ACT CAN BE ALLOWED. LD. CIT(A) IN HIS APPELLATE ORDER OBSERVED AS BELOW :- 5. I HAVE PERUSED THE FACTS OF THE CASE AS ENUMERAT ED BY A.O. AND AS SUBMITTED BY APPELLANT. I HAVE PERUSED THE CASE LAWS RELIED O N BY A.O. AS WELL AS APPELLANT. AFTER CAREFUL CONSIDERATION OF FACTS, SUBMISSION AN D CONTENTION OF BOTH A.O. AS WELL AS OF APPELLANT, GROUND WISE ADJUDICATION IS A S FOLLOWS: 5.1. GROUND NO.1 IS AGAINST THE DISALLOWANCE OF DED UCTION U/S.80P(2)(E) OF THE ACT OF RS. 12,16,935 AS CLAIMED IN ORIGINAL RETURN OF INCOME BY APPELLANT. THE A.O. IN THE IMPUGNED ASSTT. ORDER WORKED OUT THE IN COME FROM HOUSE PROPERTY AT RS.2,16,935 (IN CONTRAST TO APPELLANT'S RS.11,40,18 7) AND REJECTED DEDUCTION U/S.80P(2)(E) ON TWO GROUNDS AS FOLLOWS: (A) AS PER THE RATIO OF HON'BLE SUPREME COURT IN TH E CASE OF UDAIPUR SAHKARI UPBBHOKTA THOK BHANDAR LTD.(SUPRA) SUCH DEDUCTION I S AVAILABLE FROM THE RENT ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 4 RECEIVED FROM THE MEMBERS OF SOCIETY FOR USE OF ITS GODOWN BEING PART OF FACILITATING, STORING AND MARKETING OF COMMODITIES IN WHICH SOCIETY DEALS AND NOT FROM RENT RECEIVED FROM OUTSIDE PARTIES. (B) AS PER PARA (6) & (7) OF IMPUGNED ASSTT.ORDER, THE DEDUCTION U/S.80P(2)(D) EXHAUST THE SCOPE OF BASIC DEDUCTION U/S.80P(2)(C) BECAUSE BEFORE DEDUCTION U/S.80 P SS PER RATIO OF HON'BLE SUPREME COURT IN T HE CASE OF SABARKANT ZIIIA KHAFID VEER, AN SANQH LTO. (SUPRA) THE DEDUCTION BE ALLOWED ONLY AFTER SET OFF OF LOSS AND DEPRECIATION I.E. ON NET PROFIT AND GAINS. THE APPELLANT IN REFERENCE TO (A) ABOVE SUBMITTED T HAT ON SIMILAR FACTS DISALLOWANCES WERE MADE IN EARLIER YEARS I.E. IN A. Y.2007-08 AND A.Y.2008-09. THE ID.CIT(A) AFTER CONSIDERATION OF FACTS END CONT ENTIONS IN APPEAL NO.CIT(A)XI /1127/WD.7(1)/()9-1G VIDE ORDER DATED 28.02.2013 FO R A.Y.2007-08 AND IN APPEAL NO. CIT(A)XIV/WD.7(4)/305/2010-11 VIDE ORDER DATED 05.03.2013 FOR A.Y.2008- 09 ALLOWED THE APPELLANT'S APPEAL. THE APPELLANT DI STINGUISHED THE HON'BLE SUPREME COURT'S JUDGEMENT FACTS OF UDAIPUR SAHKARI UPBBHOKTA THOK BHANDAR LTD. (USUTBL) WITH THE FACTS OF APPELLANT ON THE GR OUND THAT IN THAT CASE, THE ASSESSEE WAS STORING ITS OWN GOODS IN THE GODOWN AN D WAS CLAIMING DEDUCTION U/S.80P(2)(E) OF THE ACT WHILE IN THE CASE OF APPEL LANT AS PER THE OBJECT AND BYE LAWS OF THE SOCIETY THE RENT INCOME IS RECEIVED FRO M THE LETTING OUT THE GODOWN / WAREHOUSE TO NON MEMBERS FOR THE PURPOSE OF STORAGE , PROCESSING OR FACILITATING THE MARKETING OF COMMODITIES. THE APPELLANT RELIED ON HON'BLE MADRAS HIGH COURT JUDGMENT IN THE CASE OF SOUTH ARCOT DISTT.CO- OPERATIVE MARKETING SOCIETY* LTD. (SADCMSL) (SUPRA) WHICH WAS UPHELD BY THE HON' BIE SUPREME COURT. I AM INCLINED WITH THE CONTENTION OF THE APPELLANT THAT THE ISSUE BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF USUTBL WAS TOTALLY DIF FERENT FROM THE FACTS OF THE APPELLANT. HON'BIE SUPREME COURT IN THE CASE OF USU TBL FOLLOWING HON'BLE GUJARAT HIGH COURT JUDGEMENT IN THE CASE OF SURAT V ANKAR SAHAKARI SANGH LTD. V. C!T(1971} 791 !TR 722 FOR THE INTERPRETATION OF SECTION 81(IV), FOLLOWED BY THE SECTION 14(3) (IV) IN THE 1922 ACT WHICH WAS A PREC URSOR OF SECTION 80P(2)(E) OF THE ACT 1951. HELD THAT THERE APPELLANT WAS IN THE BUSINESS OF TRADING AND GETTING COMMISSION OF BEING DIFFERENTIAL RATE AND THE SAME WERE HELD NOT TO BE BROUGHT UNDER PURVIEW OF RENT FROM GODOWN OR WAREHOUSES FOR THE PURPOSE OF STORAGE, PROCESSING OR FACILITATING THE MARKETING OF COMMODI TIES. IT IS THEREFORE FOLLOWING THE RATIO OF HON'BLE MADRAS HIGH COURT IN THE CASE OF SADCMSL WHICH WAS AFFIRMED BY HON'BLE SUPREME COURT AND ALSO THE RATI O OF ID.CIT(A) IN THE CASE OF APPELLANT FOR EARLIER YEAR'S APPEAL ORDER, THE A.O. IS HELD UNJUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION U/S.80P(2)(E) OF THE ACT ON THE GROUND THAT RENT WAS RECEIVED FROM OUTSIDE PARTIES AND NOT FROM MEMBERS. BUT, THE APPELLANT HAS NOT RAISED GROUND AND SUBMITTED THE EXPLANATION OR DETA IL IN RESPECT OF OTHER PART I.E. IF THERE IS NO NET PROFIT OR GAIN I.E. POSITIVE INC OME BEFORE ALLOWANCE U/S.80P OF THE ACT, THEN NO SUCH DEDUCTION U/S.80P(2)(E) OF TH E ACT CAN BE ALLOWED, IT IS THEREFORE THE GROUND RAISED IS NOT SPECIFIC AGAINST THIS CONTENTION OF A.O., BUT ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 5 FROM SUBMISSION IT IS HELD THAT THE SAME IS ONLY FO R ONE CONTENTION WHICH IS HEREBY ALLOWED WHILE FOR OTHER CONTENTION THE A.O. HAS NOT RAISED GROUND SO DISALLOWANCE FOR SUCH CONTENTION BY A.O. IS UPHELD. THIS GROUND IS TREATED AS PARTLY ALLOWED. 7. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. AT THE OUTSET LD. AR SUBMITTED THAT LD. CIT(A) HAS ALL OWED THE CONTENTION OF ASSESSEE TO THE EXTENT THAT ASSESSEES INCOME FR OM LETTING OUT THE WAREHOUSE/GODOWN FOR THE PURPOSE OF STORAGE, PROCES SING OR FACILITATING MARKETING THE COMMODITIES TO MEMBERS A ND NON-MEMBERS IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(E) OF THE ACT BY FOLLOWING THE RATIO OF DECISION OF HON. MADRAS HIGH COURT IN THE CASE O F SOUTH ARCOT DIST. CO-OP. MARKETING SOCIETY LTD.(SADCMSL) 92 ITR 371 WHICH WAS UPHELD BY HON. SUPREME COURT. HOWEVER, LD. CIT( A) HAS NOT ADJUDICATED THE GROUND COMPLETELY BECAUSE OF THE FA CT THAT DURING THE YEAR ASSESSEE HAS ERRED RS.11,40,187/- FROM LETTING OUT GODOWN/WAREHOUSES FOR DEDUCTION U/S 80P(2)(E) OF TH E ACT WAS CLAIMED WHEREAS LD. CIT(A) HAS MENTIONED IN HIS APP ELLATE ORDER THAT ASSESSEE HAS NOT RAISED THE GROUND AND ALSO NOT SU BMITTED THE DETAILS IN RESPECT OF OTHER PART I.E. IF THERE IS N O POSITIVE INCOME BEFORE ALLOWANCE U/S 80P(2)(E) OF THE ACT, THEN NO SUCH DE DUCTION U/S 80P(2)(E) OF THE ACT CAN BE ALLOWED. LD. AR FURTHER SUBMITTED THAT LD. CIT(A) HAS ALSO OBSERVED THAT ASSESSEE HAS NOT RAIS ED GROUND SO DISALLOWANCE FOR SUCH CONTENTION BY ASSESSING OFFIC ER IS UPHELD. FURTHER IT WAS SUBMITTED THAT THE ORDER OF LD. CIT( A) IS DEFECTIVE TO THE EXTENT THAT ON ONE PLACE HE IS SATISFIED WITH THE C LAIM OF DEDUCTION U/S 80P(2)(E) OF THE ACT OF INCOME EARNED BY ASSESSEE A ND IN THE VERY SAME ORDER HE HAS NOT QUANTIFIED THE DEDUCTION TO B E CLAIMED BY THE ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 6 ASSESSEE. LD. AR FURTHER SUBMITTED THAT THE ISSUE M AY PLEASE BE SET ASIDE TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION OF THE GROUND ONLY TO THE EXTENT OF QUANTIFYING THE DEDUCTION U/S 80P(2)( E) OF THE ACT CLAIMED BY ASSESSEE. 8. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS O F LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. SOLITARY GRIEVANCE OF THE ASSESSEE IS AG AINST THE ORDER OF LF. CIT(A) HAVING NOT APPRECIATED THE FACT THAT ASS ESSEE HAS POSITIVE INCOME WHICH WAS ELIGIBLE FOR DEDUCTION U/S 80P(2)( E) OF THE ACT, EVEN WHEN LD. CIT(A) DECIDED IN FAVOUR OF ASSESSEE ABOUT ITS CLAIM U/S 80P(2)(E) OF THE ACT. 10. WE OBSERVE THAT THE ASSESSEE IS A CO-OP. SOCIET Y. DURING THE YEAR ALONG WITH OTHER INCOME IT ALSO EARNED INCOME FROM LETTING OUT WAREHOUSES/GODOWNS OF RS.11,40,187/- TO NON-MEMBERS FOR FACILITATING THE STORING AND MARKETING OF COMMODITI ES. LD. ASSESSING OFFICER DENIED DEDUCTION U/S 80P(2)(E) OF THE ACT T O THE ASSESSEE BY OBSERVING THAT AS IT HAS NOT BEEN EARNED FROM THE M EMBERS, ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80P(2)(E) OF THE ACT. HOWEVER, WHEN THE MATTER CAME UP BEFORE LD. CIT(A) HE FOLLOWED THE DECISION OF HIS PREDECESSOR FOR ASST. YEAR 2007-08 AND 2008-09 WHEREIN CONSISTENTLY THE RATIO OF THE JUDGMENT LAID DOWN BY HON. MADRAS HIGH COURT IN THE CASE OF SOUTH ARCOT DIST. CO-OP. MARKETING SOCIETY LTD. (SUPRA) HAS BEEN FOLLOWED WE FURTHER F IND IT RELEVANT TO ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 7 REPRODUCE THE DECISIONS OF LD. CIT(A) FOR ASST. YEA R 2007-08 AND 2008-09 WHICH HAS BEEN FOLLOWED BY LD. CIT(A) FOR T HE YEAR UNDER APPEAL :- CIT(A)S DECISION FOR 2007-08 2.3 DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. THE MAIN OBJECTION TO DENY THE CLAIM TOR DEDUCTION U/S. 80P(2)(E) BY AO IS. THAT THE ACTIVITY OF LETTING OUT THE GODOWNS TO OTH ER THAN THE MEMBERS OF THE SOCIETY WHICH ARE NOT RELATED TO THE PURPOSE OF YOUR CO-OP, SOCIETY IS NOT ELIGIBLE AS PER PROVISIONS OF .THE ACT. THE APPELLANT HAS DISTINGUISHED THE CASE LAWS QUOTE D BY THE AO IN ASSESSMENT ORDER. THE APPELLANT HAS FURTHER RELIED UPON THE RATIO LAID DO WN BY HON'BLE MADRAS HIGH COURT IN THE CASE OF C1T VS. SOUTH ARCOT DIST. CO-OP. MARKETING SOCIETY LTD. [92 ITR 371 (MAD)] WHICH HAS BEEN CONFIRMED BY THE APEX COURT AS REPOR TED; 176 ITR 117 (SC). THE SECTION 80PJ2) IS REPRODUCED AS UNDER: 'DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOC IETIES. 80P (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A C O-OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN-SUB-SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING, NAMELY : (E) IN RESPECT OF ANY INCOME DERIVED BY THE CO-OPER ATIVE SOCIETY FROM THE JETTING OF GODOWNS OR WAREHOUSES FOR STORAGE, PROCESSING OR FACILITATI NG THE MARKETING OF COMMODITIES, THE WHOLE OF SUCH INCOME; AS CAN BE SEEN ABOVE, THERE DOES NOT APPEAR TO BE ANY REQUIREMENT THAT THE GODOWNS AND WAREHOUSES SHOULD BE GIVEN TO THE MEMBERS OF CO -OPERATIVE SOCIETY TO GET DEDUCTION U/S. 80P(2)(E) OF THE I. T. ACT, 1961. THE PRINCIPL E OF MUTUALITY IS NOT RELEVANT FOR DEDUCTION U/S. 80P(2)(E). IN VIEW OF THE RATIO LAID DOWN BY MADRAS HIGH COURT AND CONFIRMED BY APEX COURT, IT IS DECIDED THAT THE APP ELLANT IS ELIGIBLE FOR DEDUCTION U/S, 80P(2) (E) OF THE I. T. ACT, 1961. IN VIEW OF ABOVE FACTS, I AM INCLINED TO ACCEPT THE SUBMISSION MADE BY IHE APPELLANT, AND ORDER THE AO TO ALLOW THE DEDUCTION OF RS.8,57,455/- U/S.80P]2)JE) OF THE !. T. ACT, 1961. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED. ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 8 CIT(A) S DECISION FOR ASST. YEAR 2008-09 2.3 DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. THE MAIN OBJECTION TO DENY THE CLAIM FOR DEDUCTION U/S. 80P(2)[E] BY AO IS THAT THE ACTIVITY OF LETTING OUT THE GODOWNS TO OTHER THAN THE MEMBER S OF THE SOCIETY WHICH ARE NOT RELATED TO THE PURPOSE OF YOUR CO-OP, SOCIETY IS NOT ELIGIBLE AS PER PROVISIONS OF THE ACT. THE APPELLANT HAS DISTINGUISHED THE CASE LAWS QUOTE D BY THE AO IN ASSESSMENT ORDER. THE APPELLANT HAS FURTHER RELIED UPON THE RATIO LAID DO WN BY HON'BLE MADRAS HIGH COURT IN THE CASE OF C!T VS. SOUTH ARCOT DISI. CO-OP. MARKETING SOCIETY LTD. [92 !TR 371 (MAD)] WHICH HAS BEEN CONFIRMED BY THE APEX COURT AS REPORTED; 1 76 ITR 117 (SC). THE SECTION 80P(2) IS REPRODUCED AS UNDER; 'DEDUCTION IN RESPECT OF INCOME OT CO-OPERATIVE SOC IETIES. 80P. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUBSECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING, NAMELY: (E) IN RESPECT OF ANY INCOME DERIVED BY THE CO-OPER ATIVE SOCIETY FROM THE LETTING OF GODOWNS OR WAREHOUSES FOR STORAGE, PROCESSING OR FA CILITATING THE MARKETING OF COMMODITIES, THE WHOLE OF SUCH INCOME; AS CAN BE SEEN ABOVE, THERE DOES NOT APPEAR TO BE A NY REQUIREMENT THAT THE GODOWNS AND WAREHOUSES SHOULD BE GIVEN TO THE MEMBERS OF CO-OPE RATIVE SOCIETY TO GET DEDUCTION U/S. 80P(2)(E) OF THE I. T. ACT, 1961. THE PRINCIPLE OF MUTUALITY IS NOT RELEVANT FOR DEDUCTION U/S. 80P(2)(E). IN VIEW OF THE RATIO LAID DOWN BY M ADRAS HIGH COURT AND CONFIRMED BY APEX COURT, IT IS DECIDED THAT THE APPELLANT IS ELI GIBLE FOR DEDUCTION U/S. 80PJ2) (E) OF THE 1. T. ACT, 1961. IN VIEW OF ABOVE FACTS, I AM INCLI NED TO ACCEPT THE SUBMISSION MADE BY THE APPELLANT, AND ORDER THE AO TO ALLOW THE DEDUCT ION OF RS. 7,33,981/- U/S. 80P(2)(E) OF THE I. T. ACT, 1961. THE GROUND OF APPEAL IS ACCORD INGLY ALLOWED. 11. FROM GOING THROUGH THE DECISIONS OF CIT(A) IN T HE CASE OF ASSESSEE FOR ASST. YEAR 2007-08 AND 2008-09 WE OBSE RVE THAT LD. CIT(A) FOR ASST. YEAR 2009-10 HAS CONSISTENTLY FOLL OWED THE DECISIONS OF HIS PREDECESSOR BY OBSERVING THAT DEDUCTION U/S 80P(2)(E) OF THE ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 9 ACT CAN BE CLAIMED BY ASSESSEE EVEN IF THE INCOME F ROM LETTING OUT GODOWNS OR WAREHOUSES IS RECEIVED FROM NON-MEMBERS. 12. NOW ANALYZING THE FACTS WE FIND THAT IN THE COM PUTATION OF INCOME PLACED AT PAGES 53 & 54 OF THE PAPER BOOK AS SESSEE HAS DECLARED POSITIVE INCOME AT RS.11.40,187/- UNDER TH E HEAD INCOME FROM HOUSE PROPERTY FOR LETTING OUT OF GODOWNS/WAR EHOUSES AND GROSS TOTAL INCOME AT RS.19,11,642/- WHICH INTER AL IA ALSO INCLUDES INCOME FROM DIVIDEND AND INTEREST AT RS.11,88,187/- WHICH IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(D) OF THE ACT AND THERE RE MAINS POSITIVE INCOME FROM LETTING OUT GODOWN/WAREHOUSES WHICH IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(E) OF THE ACT. 13. FROM GOING THROUGH THE ORDER OF LD. CIT(A) WE F IND THAT HE HAS AGREED TO THE CONTENTIONS OF ASSESSEE FOR BEING ELI GIBLE TO CLAIM DEDUCTION U/S 80P(2)(E) BUT WHILE DECIDING THE QUAN TUM OF APPEAL IT SEEMS THAT HE HAS NOT ADJUDICATED THE ISSUE IN THE RIGHT PERSPECTIVE BECAUSE IN HIS APPELLATE ORDER HE HAS MENTIONED THA T APPELLANT HAS NOT RAISED GROUND AND SUBMITTED THE EXPLANATION OR DETAIL IN RESPECT OF OTHER PART I.E. IF THERE IS NO NET PROFIT OR GAI N I.E. POSITIVE INCOME BEFORE ALLOWANCE U/S.80P OF THE ACT, THEN NO SUCH D EDUCTION U/S.80P(2)(E) OF THE ACT CAN BE ALLOWED, IT IS THER EFORE THE GROUND RAISED IS NOT SPECIFIC AGAINST THIS CONTENTION OF A .O., BUT FROM SUBMISSION IT IS HELD THAT THE SAME IS ONLY FOR ONE CONTENTION WHICH IS HEREBY ALLOWED WHILE FOR OTHER CONTENTION THE A.O. HAS NOT RAISED GROUND SO DISALLOWANCE FOR SUCH CONTENTION BY A.O. IS UPHELD. THIS GROUND IS TREATED AS PARTLY ALLOWED. THE ABOVE OBSERVATION OF LD. ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 10 CIT(A) IS ERRONEOUS TO THE EXTENT THAT ASSESSEE IS HAVING POSITIVE INCOME FROM LETTING OUT GODOWNS/WAREHOUSES AT RS.11 ,40,187 AND SPECIFIC GROUND HAS BEEN RAISED BEFORE CIT(A) AGAIN ST LD. ASSESSING OFFICERS ACTION FOR NOT ALLOWING THE CLAIM U/S 80P (2)(E) OF THE ACT. TO THIS EXTENT THE ORDER OF LD. CIT(A) IS CRYPTIC WHIC H NEEDS FRESH ADJUDICATION. 14. WE ARE, THEREFORE, OF THE VIEW THAT IN THE GIVE N FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSUE NEEDS TO BE RE STORED BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION. WE ACCOR DINGLY DO SO. NEEDLESS TO MENTION THAT ASSESSEE MAY BE GIVEN PROP ER OPPORTUNITY OF BEING HEARD. ACCORDINGLY, THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 15. GROUND NO.3 IS OF GENERAL NATURE, WHICH NEEDS N O ADJUDICATION. 16. GROUND NO.4 IS CONSEQUENTIAL. 17. GROUND NO.5 IS PREMATURE. 18. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 30/11/2016 ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 11 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 965/AHD/2014 ASST. YEAR 2009-10 12 1. DATE OF DICTATION: 25/11/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 28/11/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 30/11/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: