TMI Blog2016 (12) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... odowns/warehouses at ₹ 11,40,187 and specific ground has been raised before CIT(A) against ld. Assessing Officer’s action for not allowing the claim u/s 80P(2)(e) of the Act. To this extent the order of ld. CIT(A) is cryptic which needs fresh adjudication. We are, therefore, of the view that in the given facts and circumstances of the case, the issue needs to be restored back to the file of ld. CIT(A) for fresh adjudication. - Decided in favour of assessee for statistical purposes. - ITA No.965/Ahd/2014 - - - Dated:- 30-11-2016 - Shri Rajpal Yadav, JM and Shri Manish Borad, AM. For The Appellant : Shri Tushar Hemani, AR For The Respondent : Shri Prasoon Kabra, Sr.DR ORDER PER Manish Borad, Accountant Member . This appeal of assessee for Asst. Year 2009-10 is directed against the order of ld. CIT(A) XIV, Ahmedabad, dated 11.11.2013 in appeal no.CIT(A)-XIV/Wd-7(1)/165/2011-12 arising out of order u/s 143(3) of the Income-tax Act, 1961 (in short the Act) framed on 28.11.2011 by ITO, Wd-7(1), Ahmedabad. Assessee has raised following grounds of appeal :- 1. The learned CIT(A) has erred in law and on the facts of the case in confirming the action o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage, processing or facilitating marketing commodities whether given to members or nonmembers. However, ld. CIT(A) erred in not properly adjudicating the ground by observing that as there is no net profit or gain i.e. positive income after allowance u/s 80P of the Act, then no such deduction u/s 80P(2)(e) of the Act can be allowed. Ld. CIT(A) in his appellate order observed as below :- 5. I have perused the facts of the case as enumerated by A.O. and as submitted by appellant. I have perused the case laws relied on by A.O. as well as appellant. After careful consideration of facts, submission and contention of both A.O. as well as of appellant, ground wise adjudication is as follows: 5.1. Ground No.1 is against the disallowance of deduction u/s.80P(2)(e) of the Act of ₹ 12,16,935 as claimed in original return of income by appellant. The A.O. in the impugned asstt. order worked out the income from house property at ₹ 2,16,935 (in contrast to appellant's ₹ 11,40,187) and rejected deduction u/s.80P(2)(e) on two grounds as follows: (a) As per the ratio of Hon'ble Supreme Court in the case of Udaipur Sahkari Upbbhokta Thok Bhandar Ltd.(supra) such dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the same were held not to be brought under purview of rent from godown or warehouses for the purpose of storage, processing or facilitating the marketing of commodities. It is therefore following the ratio of Hon'ble Madras High Court in the case of SADCMSL which was affirmed by Hon'ble Supreme Court and also the ratio of Id.CIT(A) in the case of appellant for earlier year's appeal order, the A.O. is held unjustified in disallowing the claim of deduction u/s.80P(2)(e) of the Act on the ground that rent was received from outside parties and not from members. But, the appellant has not raised ground and submitted the explanation or detail in respect of other part i.e. if there is no net profit or gain i.e. positive income before allowance u/s.80P of the Act, then no such deduction u/s.80P(2)(e) of the Act can be allowed, It is therefore the ground raised is not specific against this contention of A.O., but from submission it is held that the same is only for one contention which is hereby allowed while for other contention the A.O. has not raised ground so disallowance for such contention by A.O. is upheld. This ground is treated as partly allowed. 7. Aggrieved, ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storing and marketing of commodities. Ld. Assessing Officer denied deduction u/s 80P(2)(e) of the Act to the assessee by observing that as it has not been earned from the members, assessee is not entitled to deduction u/s 80P(2)(e) of the Act. However, when the matter came up before ld. CIT(A) he followed the decision of his predecessor for Asst. Year 2007-08 and 2008-09 wherein consistently the ratio of the judgment laid down by Hon. Madras High Court in the case of South Arcot Dist. Co-op. Marketing Society Ltd. (supra) has been followed We further find it relevant to reproduce the decisions of ld. CIT(A) for Asst. Year 2007-08 and 2008-09 which has been followed by ld. CIT(A) for the year under appeal :- CIT(A) s decision for 2007-08 2.3 Decision : I have carefully perused the assessment order and the submissions given by the appellant. The main objection to deny the claim tor deduction u/s. 80P(2)(e) by AO is. that the activity of letting out the godowns to other than the members of the society which are not related to the purpose of your Co-op, society is not eligible as per provisions of .the Act. The appellant has distinguished the case laws quoted by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been confirmed by the Apex Court as reported; 176 ITR 117 (SC). The section 80P(2) is reproduced as under; Deduction in respect of income ot co-operative societies . 80P. (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 subsection (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 income; As can be seen above, there does not appear to be any requirement that the godowns and warehouses should be given to the members of co-operative society to get deduction u/s. 80P(2)(e) of the I. T. Act, 1961. The principle of mutuality is not relevant for deduction u/s. 80P(2)(e). In view of the ratio laid down by Madras High Court and confirmed by Apex Court, it is decided that the appellant is eligible for d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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