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2004 (4) TMI 21 - HC - Income TaxAmount of reserve fund transferred from the net profit - Assessee is a co-operative marketing society who claimed that rule 68 of the Rajasthan Sahakari Sansthan Rules of the Rajasthan Co-operative Societies Rules, 1966 requires the society to transfer 25 per cent, of its net profits to a reserve fund. The said amount, according to the assessee, does not remain under the control of the assessee but it goes under the control of the Registrar, Rajasthan Co-operative Societies, therefore, it does not form part of the assessee's real income and for that reason, it was sought to be excluded from the computation of taxable income of the assessee. The deduction was also claimed under section 37 – Held that the amount of reserve fund transferred from the net profit under section 62 of the Co-operative Societies Act, 1965 read with rule 68 of the Cooperative Rules, 1966 is not allowable as deduction in computing the taxable income of the society on any of the grounds raised by the assessee.
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