TaxTMI 
TaxTMI 
1998 (12) TMI 120
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....ng the course of assessment proceedings, the Assessing Officer noted that the assessee-society had purchased ice from M/s. Shivratna Ice Factory and M/s. Dhavalsingh Ice Factory, Akluj. These factories are owned by Shri P.S. Mohite-Patil, who is the brother of Chairman Shri Raj Singh M. Patil of the assessee-society. On enquiries made with Ice Factories located at Akiuj, the Assessing Officer found that the rate of ice for supply to the dairies was ranging from Rs. 90 to Rs. 110 per M.T. The assessee-society had paid average rate of Rs. 175 per M.T. to the ice factory owned by Shri P. S. Mohite-Patil. Accordingly, the Assessing Officer invoked the provisions of section 40A(2)(a) of the Act and made an addition of Rs. 3,73,535, on account....
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.... further submitted that the price was paid after calling for the quotations. It was beneficial for the assessee to purchase ice even at a little higher rate from Akiuj where the dairy of the assessee-society was situated, because transporting ice from Solapur, Phaltan and Pandharpur would further cause loss to the society by melting of ice during the process of transportation. 5. Shri Adhir Jha, the learned Departmental Representative, strongly supported the order of the authorities below. He submitted that the status of the assessee is that of a Body of Individuals or Association of Persons and the words "Association of Persons" do find mention in section 40A(2)(a) and, accordingly, the Assessing Officer was justified in invoking the pr....
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....ans an association in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one the object of which is to produce income, profits or gains. As against the above definition of Association of Persons as stated above, a co-operative society is a voluntary association of persons not motivated by business consideration. The Income-tax Act itself distinguishes between AOP and a co-operative society in the following manner : (a) Section 2(19) of the Act defines a co-operative society. There is no definition of AOP in the Act. (b) The rates of income-tax prescribed for a co-operative society are different from the rates applicable to AOP.....
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....s not justified in confirming the addition of Rs. 17,536 on account of Guest House Expenses. At the time of hearing, this ground was not pressed. The same is, accordingly, dismissed. 10. The next grievance of the assessee is that the learned Commissioner of Income-tax(A) is not justified in confirming the function expenses of Rs. 25,822. The assessee-society claimed a sum of Rs. 52,644.65 on account of Sabha Samaroh expenses. Details of these expenses were furnished before the Assessing Officer. The Assessing Officer disallowed 50% of such expenses with cryptic remark as "for want of proof and treated as not for business purposes". On appeal, the Commissioner of Income-tax(A) confirmed the addition made by the Assessing Officer. 11. S....