TMI Blog2010 (1) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... should be dismissed. 4 The Learned Departmental Representative has not made any objection to the above submissions of the Learned Authorised Representative of the Assessee. 5 We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. The Learned Commissioner of Income-tax (Appeals) has deleted the disallowance of deduction of ₹ 39,85,291/- on account of interest and ₹ 62,99,641/- on account of dividend u/s 80P(2)(b) by observing as under:- After going through rival submissions it is seen that the AO had reproduced reply given during assessment proceedings dated 8-12-2008 by the assessee on page 3 of the assessment order wherein the assessee had stated that interest and dividend was earned out of investment of amount received for sale of milk, milk products from GCMMF Ltd. The crux of the argument was that interest and dividend received shown by the assessee was out of investments made out of own funds and not out of borrowed funds on which the appellant had given interest. It was explained in the reply to the AO that funds were borrowed in connection with various projects undertaken, plant and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) of ₹ 50,000/- to the appellant. 8 We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. The Learned Assessing Officer disallowed deduction of ₹ 50,000/- claimed by the assessee u/s 80P(2)(c)(ii) by observing as under: 3.3.3 The assessee has claimed deduction of ₹ 50,000/- u/s 80P(2)(c) of the Act. Deduction under this section is allowable only to the Co-operative societies other than those specified in Section u/s 80P(2)(a) and u/s 80P(2)(b) of the Act. The assessee fall in section u/s 80P(2)(b) of the Act. Hence deduction of ₹ 50,000/- claimed u/s 80P(2)(c) of the Act is being disallowed. We find that section 80P(2)(c) reads as follows: (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 gains attributable to such activities as (does not exceed, - Where such co-operative society is a consumers cooperative society, [one hundred] thousand rupees; and (ii) In any other case, [fifty] th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above the assessee furnished its reply vide letter as under: During the year under consideration, we were eligible to get the deduction u/s 80IB in respect of our Banas-II Dairy Expansion Plant. We are enclosing herewith Statement showing increase in production capacity in Banas-II Dairy Expansion Plant. We are enclosing herewith copy of Turnkey agreement made with NDDB at Annexure 54, from which your goodself would appreciate that the same is for expansion of Banas-II Dairy. We had taken separate power connection for Banas-II Dairy. We are enclosing herewith certificate issued by GEB for separate power connection. (Ann. 5). Such expansion in capacity was already commissioned in earlier assessment year 2002-03 where all these aspects have been gone into at the assessment level. Further this is a continuous relief and when the same has been accepted in the earlier assessment years, there is no question of reappraising the evidences produced and accepted in the earlier years. This being the 5th year of claim, we are claiming deduction j@ 25% as mentioned in our letter dated 25-11-2008. e. The claim of deduction u/s 80IB was not allowed by the then AO in AY 2004-05 and 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) On verification of Column No.13 of form 10CCB which has been left blank. As p.er Action points the assessee was required and to submit Audit Report accompanied by a copy of the agreement of the enterprise with government/ local authority for carrying on the business of infrastructure facility. In cases other than infrastructure facility the audit report must be accompanied by a copy of agreement/approval/permission signed and issued by the central government / state govt./ local authority for carrying on the eligible business. Assessee has not furnished any such report. (iv) On the basis of the above the deduction of ₹ 3,31,37,355/- which was revised by the assessee at ₹ 82,84,339/- as per letter dated 25-11-2000. However, disallowance claimed in the return of income shown at ₹ 3,31,37,355/- is being disallowed. By claiming wrong deduction the assessee has furnished inaccurate particulars of income. Hence penalty proceedings has been initiated u/s 271(1)(c) of the Act. 12 In appeal, the Learned Commissioner of Income-tax (Appeals) allowed the claim of the assessee observing as under: After going through rival submissions, I find that the claim u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income being the amount of 100% income derived from Banas-II Dairy Expansion Plant. The assessee vide its letter dated 25-11-2008 revised its claim for deduction u/s 80IB to ₹ 82,84,339/- in place of ₹ 3,31,37,355/- and according to the assessee it was entitled for deduction at the rate of 25% not 100% of the profit of Banas-II Dairy Expansion Plant. The Learned Assessing Officer disallowed the claim of ₹ 82,84,339/- also by observing as stated above in this order. On appeal, the Learned Commissioner of Income-tax (Appeals) deleted the disallowance of ₹ 82,84,339/- for the reasons also quoted above in this order. We find that the Learned Commissioner of Income-tax (Appeals) deleted the disallowance of deduction by following the order of the Tribunal passed in the case of the assessee itself for Assessment Year 2004-05. The Learned Departmental Representative could not point out any good reason as to why the above order of the Tribunal passed in the case of the assessee itself for the Assessment Year 2004-05 should not have been followed by the Learned Commissioner of Income-tax (Appeals) for the Assessment Year under appeal also. However, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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