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2019 (10) TMI 316 - AT - Income TaxClaim of deduction u/s 80P(2)(b) - assessee has sold the milk at a higher rate to outside parties - HELD THAT:- We find force in the argument of the Ld.A.R. that it is not a case where assessee has sold the milk at a higher rate to outside parties, in fact assessee was getting higher price on sale of milk to Federal Society in addition to undisputed benefit of deduction u/s 80P(2)(b). It is not a case where assessee has suo-moto volunteered to sell milk in the open market. It was after the denial of Federal Society to accept the milk that the assessee was constrained to sell the milk in open market at a price lower than the price offered by Federal Society. The Hon’ble Apex Court in the case of Bajaj Tempo Limited Vs. CIT [1992 (4) TMI 4 - SUPREME COURT] has held that a provision in a taxing statute which grants incentives to promote growth and development should be construed liberally so as to advance the objective of the section and not to frustrate it. It is an undisputed position that provisions of deduction u/s 80P is a provision to promote development of Co-operative Sector. Considering the totality of the aforesaid facts and relying on the aforesaid decision of Hon’ble Apex Court cited herein we are of the view that assessee is eligible for deduction u/s 80P2(b) on the milk sold to outside parties. The assessee would be eligible for the benefit of deduction u/s 80P(2)(b) on sale of milk at a price at which it has actually sold in the open market or price at which milk is sold to Federal Society, whichever is less. For the month of August, 2008, there is no sale of milk by the assessee to the Federal Society and the sale of ₹ 1,24,34,116/- is only to outsiders, hence, we are of the view that benefit of deduction should not be extended on sale of milk for the month of August, 2008. We therefore direct the AO to re-compute the deduction u/s 80P(2)(b) of the Act by excluding the sale made to outsiders in the month of August, 2009
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