High Court allows Department's appeal on deduction for agricultural cooperative society

The Department's appeal was allowed by the High Court, overturning the CIT(A)'s deletion of an addition and allowing the deduction u/s 80P(2)(e) for an apex cooperative society engaged in storing agricultural commodities. The Court held that storing was part of the business activity, resulting in the Department's appeal being allowed. On the other hand, the Assessee's appeal concerning the deduction claimed u/s 80P(2)(d) on dividend and interest income was remitted back to the Assessing Officer for fresh adjudication in line with previous Tribunal orders for consistency.

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Issues involved: The judgment involves issues related to the deletion of addition by the CIT(A) and the deduction u/s 80P(2)(e) of the Income-tax Act in the Department's appeal, as well as the deduction claimed u/s 80P(2)(d) on dividend and interest income in the Assessee's appeal.

Department's Appeal - ITA No. 1081/Chandi/2010:
The Department appealed against the CIT(A)'s deletion of an addition of Rs. 14,80,41,864 and the allowance of deduction u/s 80P(2)(e). The appellant, an apex cooperative society, procured agricultural commodities for the Government and received income for storage charges. The CIT(A) allowed the deduction u/s 80P(2)(e) based on previous Tribunal orders, but the High Court ruled in favor of the Revenue, stating that storing was part of the business activity. Consequently, the Department's appeal was allowed, as the issue was decided in favor of the Department by the High Court.

Assessee's Appeal - ITA No. 1095/Chandi/2010:
The Assessee appealed regarding the deduction claimed u/s 80P(2)(d) on dividend and interest income. Both parties acknowledged that a similar issue had been addressed by the Tribunal in earlier years. The Tribunal remitted the issue back to the AO for fresh adjudication in accordance with the law. As the issue was identical to previous years and for consistency, the matter was restored to the AO for a fresh decision. The order passed by the CIT(A)/Assessing Officer was set aside, and the appeal filed by the Assessee was treated as allowed for statistical purposes.

In conclusion, the Department's appeal was allowed based on the High Court's ruling, while the Assessee's appeal was remitted back to the AO for fresh adjudication in line with previous Tribunal orders for consistency.

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