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The Income-tax Officer, Ward-5 (4) Versus The Puna Kumbharia Coop. Fruit & Vegetable Society Ltd.

2015 (7) TMI 327 - ITAT AHMEDABAD

Reopening of assessment - disallowances of deduction claimed u/s.80P(2) - CIT(A) directing re-computing the total income after deduction u/s.80P of ₹ 10,81,712/- as against ₹ 50,04,034/- determined by the A.O - Held that:- The appellant had wrongly reduced the items of' Municipal Taxes pertaining to house properties as against adding it back. This would increase the income from business activity further by ₹ 56,400/-. Therefore the income determined from its business and profes .....

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e deductions claimed by the appellant in its revised computation before me, the deductions of ₹ 28,224/- u/s. 80P(2)(a)(iv), ₹ 50,000/- u/s. 80P(2)(c) and ₹ 395471/- u/s. 80P(2)(d) are held as admissible to the appellant. Its claim of deduction of ₹ 539379/- u/s. 80P(2)(iii) of the act in respect of vegetable commission is inadmissible as there was no profit from this activity. This activity has resulted in a loss which has wiped out the profits generated by the CNG and P .....

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P of the act is admissible to the appellant is only ₹ 473695/- [ ₹ 28,224/- + ₹ 3,95,471/- + ₹ 50,000/-]. The total taxable income of the appellant which is gross total income less deduction u/s. 80P(2) of the act works out to ₹ 10,81,712/- [ ₹ 15,55,407/- ₹ 4,73,695/-). The total taxable income is determined at ₹ 1081710/-. The A.O. is directed to consider this as taxable income of the appellant

The aforesaid findings of the ld.CIT(A) i .....

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order of the Ld.Commissioner of Income Tax(Appeals)-IV, Surat ( CIT(A) in short) dated 30/12/2010 pertaining to Assessment Year (AY) 2007-08. The Revenue has raised the following grounds of appeal:- [1] On the facts and in the circumstances of the case and in Law, the Ld.CIT(A), Surat has erred in re-computing the total income after deduction u/s.80P of ₹ 10,81,712/- as against ₹ 50,04,034/- determined by the A.O. after making disallowing on account of : i. Disallowance of fertilizer .....

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ay be set aside and that of the Assessing Officer restored. 2. Briefly stated facts are that the case of the assessee was reopened for assessment and the assessment u/s.143(3) r.w.s.147 of the Income Tax Act,1961 (hereinafter referred to as the Act ) was framed vide order dated 31/12/2009. While framing the assessment, the Assessing Officer (AO in short) made disallowance of deduction on various items claimed u/s.80P(2)(a)(iii) of the Act. The AO made disallowance of ₹ 50,04,034/-. The ass .....

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argued that the ld.CIT(A) was not justified in deleting the disallowances. He reiterated the submissions as were made in the statement of facts. He submitted that the ld.CIT(A) has not appreciated that the assessee has failed to explain the justification for claiming deduction u/s.80P of the Act. 3.1. On the contrary, the ld.counsel for the assessee supported the order of the ld.CIT(A). 4. We have heard the rival submissions, perused the material available on record and gone through the orders o .....

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from different ineligible activities as taxable income is incorrect. With a view to determine the correct income of the appellant, the accounts were perused which show that the appellant had claimed several capital expenses and made provisions and reserves in its accounts which were inadmissible and should have been disallowed for determining the gross total income of the appellant. It was further observed that income from CNG out let and petrol/diesel distribution out let were situated on the h .....

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ements for supplying them to its members). Similarly, income from premises given on rent to Bank of Baroda, M/s. Dhiraj Sons (Mega Stores) and Baroda Swarojgar Vikas Sansthan is also not eligible for deduction u/s. 80P of the act as it does not fulfill the criteria prescribed u/s. 80P(2)(e) and (f) of the act. 3.2. Based on the above the fresh computation of income of the appellant was done adding back the inadmissible expenses in the nature of building fund provisions, property expenses, differ .....

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and. 80P(2)(iv) of the act, ₹ 28,224/- (purchase and sales of fertilizers for members). No deduction u/s. 80P(2)(a)(iii) of the act - sale of produce of members was available since this activity had resulted in loss to the appellant. The assessee was given a show cause in terms of provisions of section 251(2) of the Act as to why his income should not be determined in this way. The appellant was also required to show as to whether payment of provident fund and other similar dues and taxes .....

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n this revised computation by the assessee amounting to ₹ 10,13,074/- comprises :- i) Agricultural implements for supply to members ₹ 28,224/- u/s 80P(2)(a)(iv). ii) Interest and dividend from other co-operative society ₹ 95,471/- u/s 80P(2)(d). iii) Marketing of Agricultural produce of members ₹ 5,39,379/- u/s 80P(2)(a)(iii). iv) Basic deduction ₹ 50,000/- u/s 80P(2)(c). Total... ₹ 10,13,074/- 5. It is seen from the computation of income submitted by the appe .....

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business activity further by ₹ 56,400/-. Therefore the income determined from its business and profession would be ₹ 77,598/- (Loss) as against loss of ₹ 2,88,873/- shown by the appellant [ - ₹ 2,88,873/- + Rs.l,54,875/- + ₹ 56,400/-]. The gross total income of the appellant would be higher by an amount of ₹ 211275/- than what has been shown by the appellant in its computation of income submitted in response to the show cause. The gross total income of the app .....

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