TMI Blog1994 (1) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the interests of the Revenue within the meaning of section 263 of the Act ? 2. Whether the Tribunal was justified in law in confirming the order as to bifurcating expenses against different types of incomes and in recomputing the amount of profits and gains attributable to the activities specified in section 80P(2)(a)(iv) of the Act ? 3. Whether, on the facts and in the circumstances of the case, the order of the Income-tax Officer can be said to have been erroneous in so far as the same is said to be prejudicial to the interests of the Revenue?" The relevant assessment years are 1975-76 to 1977-78. The assessee is a co-operative society rendering various services to its members as well as non-members, who are agriculturists. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recompute the amount of profits and gains attributable to the activities specified in section 80P(2)(a)(iv) of the Act for the said assessment by taking into account the proportionate expenditure incurred and duly debited in that behalf to the profit and loss account. The assessee appealed before the Tribunal and the Tribunal, relying upon the decision of this court in CIT v. Sabarkantha Zilla Kharid Vechan Sangh Ltd. [1977] 107 ITR 447, upheld the order of the Commissioner. The relevant provision of section 80P(1) and (2)(a)(iv) which calls for consideration is as under : " 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in subsection (2), there shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by section 80P(2)(a)(iv) of the Act not with respect to the amount of gross profits and gains of business, but only with respect to the amount of net profits and gains, i.e., income of its business otherwise computable according to the provisions of the Income-tax Act. It would thus appear that the Tribunal was right in G confirming the decision of the Commissioner of Income-tax holding that there had been an excess deduction under section 80P(2)(a)(iv) of the Act due to the failure of the Income-tax Officer to take into account the relevant expenditure. The Tribunal has, in this context, relied upon the decision of this court in CIT v. Sabarkantha Zilla Kharid Vechan Sangh Ltd. [1977] H 107 ITR 447, in which, while considering the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance on its earlier decision in Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120, which was rendered in the context of section 80M of the Act. It was held therein that the full amount of dividend received by the assessee would not be included in the gross total income ; what would be included would only be the amount of dividend as computed in accordance with the provisions of the Act. It was held that the deductions required to be made for computing the total income from the gross total income can only be from the amount of dividend computed in accordance with the provisions of the Act which would be forming part of the gross total income. In view of the above settled legal position, while granting deduction under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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