Income Tax Appellate Tribunal - Ahmedabad
M/S. Sundalpura Dudh Utpadak Sahakari ... vs Ito, Ward-2, , Aanad on 19 December, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "SMC" BENCH
(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 V/S ITO Ward-2, Anand
Utpadak Sahakari Mandli
Ltd. At: Sundalpura Tal:
Umreth-388210
(Appellant) (Respondent)
PAN: AAALS0459B
Appellant by : Smt. Pranali Thakar , AR
Respondent by : Shri N. K. Goyal, Sr. D.R.
(आदे श)/ORDER
Date of hearing : 17 -10-2019
Date of Pronouncement : 19 -12-2019
PER MAHAVIR PRASAD, JUDICIAL MEMBER
1. This appeal filed by the Assessee is directed against 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:
2 ITA No.175/Ahd/2018. A.Y.2013-14
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) of 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 deduction 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 addition, alteration, amendment or withdrawal of any of the grounds of appeal preferred, during the course of hearing of this appeal.
2. Facts of the case are that the appellant is a Primary Co-operative Society engaged in the activity of supplying Milk to the Federal Co-operative Society i.e. AMUL in the name of stile "M/s Sundalpurapura Dudh Utpadak Sahakari Mandli Ltd.". The appellant co-operative society maintains books of account 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 appellant's 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 submitted the details called for.
3. However the Assessing Officer finalized the scrutiny assessment after making heavy additions. He made addition amounting to Rs. 9,11,780/- i.e. out of the total deduction claimed of Rs. 9,61,776/-, Rs. 50,000/- was 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/-.
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5. Against the order of the ld. CIT(A), assessee preferred second statutory appeal before us.
6. Now assessee has come before us.
7. We have gone through the relevant record and impugned order. The assessee is a Primary Co-operative Society established 48 years ago and it is engaged in the activities of collecting Milk from its individual members 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 Individual Milk producer persons, who were producing Milk and contributing the same into 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, being a primary society engaged in supplying Milk, Oil Seeds, Fruits or Vegetables raised or grown by its members".
9. In this case, individual members are producing Milk and supplying to a Co-operative Society.
10. In support of its contention, ld. A.R. cited a judgment in the matter of Kerala State Co-operative Marketing Federation Ltd. & Ors. vs. CIT wherein relief was granted to a Society which was engaged in the similar activities with following observation:
"No. 506 of 1994, filed by the Kerala State Cooperative Marketing Federation Limited and apply the result thereto in other matters. The society 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 4 ITA No.175/Ahd/2018 . A.Y.2013-14 business of banking and providing credit facilities to its members; (b) engaged in cottage industry; (c) society engaged in marketing agricultural produce of its members; (d) engaged in purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying 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 supplying milk raised by its members to a federal milk co-operative society."
11. And in a recent order of ITAT Cochin Bench has delivered the following judgment in favour of assessee in the matter of ITO vs. Credit Society Ltd. dated 29.08.2018 with following observation:
"M/s.Sahyadri Co-op Credit Society Ltd. marketing of agricultural produce grown by its members, or (iv) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or (v) the processing, without the aid of power, of the agricultural produce of its members, or
(vi) the collective disposal of the labour of its members, or (vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing offish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount 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 following 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 societies which provide financial assistance to the society; (3) the State Government; (b) in the case 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 society, being a society engaged in the business of supplying milk, oilseeds, fruits, or vegetables, as the case may be; or (ii) the Government or a local authority; or (iii) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business; (c) in 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 80P(4) is reproduced hereunder: (4) The provisions of this section shall not apply in relation 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."
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12. Respectfully following the Supreme Court judgment and in parity with the aforesaid ITAT order, we allow the appeal of the assessee.
13. In the result, appeal filed by the Assessee is allowed.
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,Ahmedabad