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TMI Blog2012 (6) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... any other agency for the purposes of storage ? (ii) Whether the hon'ble Income-tax Appellate Tribunal have erred in law in allowing deduction under section 80P(2)(e) of the Act once a finding had been recorded that the assessee did not fulfil the ingredients of section 80P(2)(e) of the Act as the income had not been derived from letting of godowns or warehouses for storage processing or facilitating the marketing of commodities ? (iii) Whether the hon'ble Income-tax Appellate Tribunal was justified in issuing direction regarding calculation of correct amount of proportionate expenses of deduction under section 80P(2)(e) of the Act when the deduction under section 80P(2)(e) of the Act itself is not available ?" 2. The assessee is a co-operative society and procures agricultural commodities on behalf of the Government from grain markets. Wheat is pro- cured at price fixed by the Government and is delivered to the FCI. Till its delivery, it is kept in godown of the assessee. In addition to the price of the wheat, the assessee also got charges for storage. In respect of the income from the charges for storage, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.' Section 80P grants deduction out of the income included in the gross total income. Section 80AB restricts the deduction to the income as computed in accordance with the provisions of the Act, which is included in the gross total income. The said section reads as under : '80AB. Where any deduction is required to be made or allowed under any section included in this Chapter under the heading "C.- Deductions in respect of certain incomes" in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee supports the view taken by the Tribunal. He submits that the judgments relied upon by the Revenue are distinguishable. He relies on the judgment of the hon'ble Supreme Court in CIT v. South Arcot District Co-operative Marketing Society [1989] 176 ITR 117 (SC). 8. Before considering the matter further, it will be appropriate to reproduce the relevant statutory provision of section 80P(2)(e) of the Act : "80P. Deduction in respect of income of co-operative societies.-(1)Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely :- . . . (e) In respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding stock, hence, it was not entitled to claim deduction for such margin under section 80P(2)(e) of the 1961 Act." 12. Thus, the submission on behalf of the Revenue that exemption under section 80P(2)(e) is available only in respect of income from "letting out" for purposes mentioned therein is fully supported by the judgment in Udaipur Sahkari Upbhokta. Income from storage without storage space having been "let out" as such is not per se eligible for exemption. 13. The judgment in South Arcot relied upon on behalf of the assessee was distinguished in Udaipur Sahkari Upbhokta, holding that therein statutory or compulsory sale was not in issue. The assessee was storing stock belonging to the Government under an agreement and in such fact situation, it was held that storage charges could be equated to hire charges. 14. In the present case, it has been clearly held that the assessee was purchasing the goods and then selling the goods to the FCI and in such a situation, storing was part of business of the assessee and did not amount to letting out of storage capacity as till the goods were sold to the FCI, goods belonged to the assessee itself, and not to the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n I. T. A. Nos. 315 and 316/ Chandi/2000 and, vide order dated September 15, 2004, the same has been decided in favour of the assessee. We respectfully following the said decision of the Tribunal in the assessee's own case (supra) direct the Assessing Officer to allow deduction under section 80G out of the taxable income of the assessee." 18. It is not clear in the order of the Tribunal that the assessee had produced any proof though learned counsel for the assessee submits that proof may have been produced before the Tribunal. In this view of the matter, we answer the question in favour of the Revenue subject to the observation that if the assessee had produced any proof, this aspect will be looked into by the Assessing Officer and claim under section 80G of the Act will be allowed, if any proof is produced in that regard. I. T. A. No. 268 of 2006 will stand allowed accordingly. 19. In I. T. A. No. 276 of 2009, the following additional question has been raised : "Whether, on the facts and in the circumstances of the case and in law, the learned Income-tax Appellate Tribunal is correct in holding that the expenditure of Rs. 37,50,000 paid for Sahakarita Bhaw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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