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of <h1>Tribunal affirms deductions under Income Tax Act for interest, dividend, and plant, dismissing Revenue's appeal.</h1> <h3>The Assistant Commissioner of Income-tax, Palanpur Versus The Banaskantha District Co-operative Milk Producers’ Union Ltd.</h3> The Tribunal upheld the Commissioner of Income-tax (Appeals) decisions regarding deductions u/s 80P(2)(d) on interest and dividend, u/s 80P(2)(c) of Rs. ... - Issues Involved:1. Deduction u/s 80P(2)(d) on interest and dividend.2. Deduction u/s 80P(2)(c) of Rs. 50,000.3. Deduction u/s 80IB on Banas-II plant.Summary:Issue 1: Deduction u/s 80P(2)(d) on interest and dividendThe Revenue challenged the allowance of deduction u/s 80P(2)(d) by the Commissioner of Income-tax (Appeals) on interest of Rs. 39,85,291 and dividend of Rs. 62,99,641. The Tribunal noted that the issue was already decided in favor of the assessee in earlier years (ITA No.3730/Ahd/2002 for AY 1990-91). The Commissioner of Income-tax (Appeals) had observed that the interest and dividend were earned from investments made out of own funds, not borrowed funds. The Tribunal found no merit in the Revenue's appeal and dismissed it.Issue 2: Deduction u/s 80P(2)(c) of Rs. 50,000The Revenue contested the allowance of Rs. 50,000 deduction u/s 80P(2)(c). The Commissioner of Income-tax (Appeals) noted that the assessee was not a primary cooperative society as described in section 80P(2)(b) and thus eligible for deduction u/s 80P(2)(c). The Tribunal upheld this view, stating that the assessee's activities were not covered by clause (b) of section 80P(2). The appeal on this ground was dismissed.Issue 3: Deduction u/s 80IB on Banas-II plantThe Revenue disputed the deduction of Rs. 82,84,339 u/s 80IB for the Banas-II plant. The assessee had revised its claim from Rs. 3,31,37,355 to Rs. 82,84,339, asserting eligibility for 25% deduction. The Commissioner of Income-tax (Appeals) allowed the deduction, referencing the Tribunal's decision in the assessee's favor for AY 2004-05. The Tribunal found no reason to deviate from the earlier decision and dismissed the Revenue's appeal, noting that the apportionment of common expenses would actually increase the profit of the Dairy Business, not reduce it.Conclusion:The Tribunal dismissed the appeal filed by the Revenue on all grounds, affirming the decisions of the Commissioner of Income-tax (Appeals) regarding deductions u/s 80P(2)(d), 80P(2)(c), and 80IB.
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