KAIRA DIST CO.OP MILK PRODUCERUNION LTD. V. COMMISSIONER OF INCOME-TAX

ITR/28/1990

AI Insights

The case involves Kaira District Co-op Milk Producers Union Ltd. versus the Commissioner of Income-Tax, concerning the interpretation and application of section 35C of the Income-tax Act, 1961, for the assessment year 1976-77. The primary issues revolved around the eligibility for weighted deductions on certain expenditures and the deductibility of cost price of milk powder and soya flour received free from UNICEF. The Appellate Tribunal had previously ruled on these matters, which were contested by the assessee. The High Court, referencing earlier decisions, upheld the Tribunal's interpretation and application of the law, favoring the assessee on all counts.

• Counselvise Citation: [2002] 140 COUNSELVISE.COM (IT) 727319 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 04-07-2002
• Assessment Year: misc
• Other Referred Cases: Kaira Dist. Co-op. Milk Producers' Union Ltd. vs. CIT, (2002) 253 ITR 766, CIT vs. Kaira District Co-op. Milk Producers' Union Ltd., (2001) 247 ITR 314
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: TANVISH BHATT
• Assessee Lawyers: MANISH SHAH; J P SHAH
• Keywords: Deductible; Expenditure; Milk Powder; Total Income; Weighted deduction; Soya flour
• Section: 35C

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 28 of 1990 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE K.A.PUJ ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- KAIRA DIST CO.OP MILK PRODUCERUNION LTD. Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 28 of 1990 MR MANISH SHAH with MR JP SHAH for Petitioner No. 1 MR TANVISH U BHATT for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE K.A.PUJ Date of decision: 04/07/2002 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the assessee, the following questions are referred for our opinion in respect of assessment year 1976-77 :- 1. On the facts and circumstances of the case, whether the Appellate Tribunal was right in its interpretation and application of section 35C of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the entire expenditure of Rs.39,24,979/- was not eligible for weighted deduction under section 35-C ? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that only 10% of the expenses incurred on dissemination of information or demonstration of modern techniques and the methods or agricultural, animal husbandry or dairy or paultry farming or advice on such techniques or methods is eligible for weighted deduction u/s. 35 C of the Act ? 4. Whether, on the facts and in the circumstances of the case the Appellate Tribunal was right in law in holding that cost price of milk powder and soya flour received by the union from the UNICEF free of charge is not deductible in computation of total income ? 2. We have heard Mr Manish J Shah, learned counsel for the applicant-assessee and Mr Tanvish Bhatt, learned standing counsel for the revenue. 3. At the hearing today, our attention is invited to the decision of this Court in Kaira Dist. Co-op. Milk Producers' Union Ltd. vs. CIT, (2002) 253 ITR 766 which has concluded the controversy covered by the first three questions and the questions have been answered in favour of the assessee. Following the aforesaid decision, we answer question Nos. 1 to 3 in the affirmative i.e. in favour of the assessee and against the revenue. 4. Coming to question No. 4, our attention is invited to the decision of this Court in CIT vs. Kaira District Co-op. Milk Producers' Union Ltd., (2001) 247 ITR 314 where also the controversy raised by this question has been concluded in favour of the assessee. Following the aforesaid decision, we answer question No. 4 in the affirmative i.e. in favour of the assessee and against the revenue. 5. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (K.A. Puj, J.) sundar/- "