Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 564 - AT - Income TaxDeduction u/s 80P(2)(d) - bonus received by the assessee from M/s. Karnataka Co-operative Milk Producers’ Federation (KMF) - interest or dividend derived by the Co-operative Society from its investments with any other Co-operative Society - HELD THAT:- Bye Laws of KMF, it is seen that every member is entitled to receive some amount as bonus and some amount as dividend as distribution of net profit by KMF on the basis of computing the allowable to be paid by the KMF is different. Bonus is payable for the members with the transaction with KMF and this is the restriction that it should not exceed 25% of the remaining profit after transfer to reserve fund and contribution to Cooperative Education Fund. The dividend is payable as percentage of investment of members out of remaining profit after deducting all other payments to be made such as transfer to reserve fund, contribution to Cooperative Education Fund, Bonus to Members, contribution towards infrastructure fund, contribution towards Nandini Dairy Farmers welfare trust, contribution towards development of affiliated milk union, contribution towards the co-operative propaganda fund, contribution towards Bad Debt Fund and contribution towards charitable fund and dividend is payable only if there is remaining profit after these transfers as noted above and such dividend should not exceed 25% of share investment. It is seen that the computation mechanism for payment of bonus and dividend are different but both are towards distribution of net profit of KMF. This is also accepted legal position that divided is only distribution of net profits. Under these facts, we find force in the argument of assessee that the nature of bonus received by the assessee from KMF is nothing but dividend only although the mechanism of its computation is different because both bonus and dividend are paid to the assessee as distribution of net profit only. Direct the AO to consider the amount of bonus received by the assessee from KMF as dividend received from KMF and allow deduction under section 80P(2)(d) of the Act in respect of receipt of bonus also. - Decided in favour of the assessee.
|