TMI Blog2019 (10) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) 1, Kolhapur for the assessment years 2014-15 and 2015-16, respectively. Before me, both the parties submitted that though the appeals are for two different assessment years but the issue involved in both the appeals are identical except for the assessment year and the amounts involved. They therefore submitted that they have common arguments for both the years. In view of the aforesaid facts, I, for the sake of convenience proceed to dispose of both the appeals by a consolidated order but however proceed with narrating the facts for assessment year 2014-15. ITA No. 2215/PUN/2017, (A.Y. 2014-15) 2. The relevant facts as culled out from the material on record are as under :- Assessee is a Co-operative Society registered under the Co-operative Societies Act. The society is engaged in the business of collecting milk from primary societies and supplying the same to federal society as well as non-federal parties. The assessee filed its return of income for A.Y. 2014-15 on 29-11-2014 declaring total income at Nil by claiming deduction of ₹ 43,36,867/- u/s. 80P of the Act. The case was selected for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o federal society and 94.89% of the milk was sold to the other private parties. He was of the view that on the profits earned from sale of milk to other than federal society, assessee is not eligible to claim deduction u/s. 80P of the Act. He accordingly, restricted the deduction u/s. 80P to 5.11% of the net profit and accordingly worked out the deduction u/s. 80P(2)(b) at ₹ 2,21,612/- as against the assessee s claim of ₹ 43,36,867/-. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the CIT(A) who upheld the order of Assessing Officer. Aggrieved by the order of CIT(A), the assessee is now in appeal. 4. Before me, the ld. AR reiterated the submissions made by before Assessing Officer and CIT(A) and further submitted that the Mahananda is a state level milk sanstha and its capacity is 1000000 liters per day. Excess over this capacity cannot be purchased by the Mahananda as there are more than 100 members of this federal society and every member is ready to supply the milk. As the collection capacity of the federal society is insufficient to purchase milk from every member of the society, Mahahanda has permitted members t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adak Sangh Limited Vs. ITO (supra) the ld. DR did not controvert the submissions made by the ld. AR. 6. I have heard the rival submissions and perused the material on record. I find that the issue in the preset case is with respect to denial of claim of deduction u/s. 80P(2)(b) of the Act on milk sold by the assessee to other than federal society. I find that identical issue arose before the Co-ordinate Bench of Tribunal in the case of Fattesinghrao Naik (Appa) Sahakari Dudh Utpadak Sangh Limited Vs. ITO (supra) wherein the Co-ordinate Bench of Tribunal decided the issue in favour of assessee but however for quantification of deduction, remitted the issue back to the file of Assessing Officer by observing as under : 6. We have heard the rival submissions and perused the material on record. The issue in the present appeal is with respect to claim of deduction u/s 80P(2)(b) of the Act. It is an undisputed fact that assessee is a Co-operative Society engaged in the business of collecting milk from farmers / primary societies and supplying the same to Federal Societies as well as non-federal parties. It is an undisputed fact that for the year under c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milk that the assessee was constrained to sell the milk in open market at a price lower than the price offered by Federal Society. 8. The Hon ble Apex Court in the case of Bajaj Tempo Limited Vs. CIT (supra) 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) of the Act on the milk sold to outside parties. However, 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 outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied the Milk collected from its members to Federal Society as well as to Private parties. Alternatively, your appellant would like to raise the following ground : 2. On the facts and in the circumstances of the case and in law the lower authorities erred in denying the deduction of ₹ 27,58,920/- u/s. 80P(2)(a)(iii), by disregarding the appellant s contention in this regard as it has complied with all the provisions of the said section. 11. The appeal is time barred by two days. The assessee has filed an application seeking condonation of delay in filing of the appeal. After perusal of the same, we are satisfied that the delay in filing of the appeal is not intentional or deliberate but has been caused due to bonafide reasons as stated in the application. The delay in filing of appeal is condoned and the appeal is admitted to be heard and disposed of on merits. 12. Since, the facts in the assessment year under appeal are identical to the assessment year 2014-15, the findings given by us while adjudicating the appeal in assessment year 2014-15 would mutatis mutandis apply in the assessment year under ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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