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2023 (4) TMI 87 - ITAT AHMEDABADDisallowance of deduction u/s 35AD - leasing out of Godown for non agriculture purpose - skimmed milk does not constitute “agricultural produce” - four out of the five go-downs were leased out for specified purposes as mentioned in the Act viz. storage of agricultural produce - As per assessee skimmed milk constituted “agricultural produce” and secondly, even if deduction were to be disallowed u/s. 35AD, then, it has to be only in proportionate to the go-down leased to Banas Dairy and the entire deduction cannot be disallowed, since there is no allegation that the balance four go-downs were not leased out for “agricultural purposes” - HELD THAT:- Since the assessee had undisputably leased four out of the five properties/go-downs for the purpose of storage of “agricultural produce” and there was discrepancy only with respect to one leased out go-down to Banas Dairy, the whole deduction claimed by the assessee could not be denied u/s. 35AD of the Act and in view of the provisions of section 35AD(7B) of the Income Tax Act as it stood at the relevant time, in our considered view, the CIT(A) had correctly restricted the disallowance only with respect to the godown leased out to Banas Dairy for the “non-agricultural” purposes. Appeal of the Department is dismissed.
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