2011 (4) TMI 779

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....ising following substantial questions of law:-   "i) Whether on the facts and in the circumstances of the case, the Ld. ITAT is justified in cancelling the order of Commissioner of Income tax u/s 263 by holding that the Assessing Officer's order was not erroneous and was not prejudicial to the interest of revenue?   ii) Whether on the facts and in the circumstances of the case, the Ld. ITAT is justified in cancelling the order of Commissioner of Income tax u/s 263 wherein he had held the action of the Assessing Officer as unsustainable in law?"   2. The assessee is a federation of cooperative societies and is engaged in marketing agricultural produce of its members. It claimed exemption under Section 80P(2)(a)(iii) of the ....

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....rehousing Corpn., 210 ITR 906, where it has been held that only income derived from letting of godowns or warehouses for facilitating marketing of commodities qualifies for deduction. The ITAT, Delhi Bench in the case of Haryana Warehousing Corporation Vs. DCIT, 61 ITD 420, followed this judgment. Even the Hon'ble Supreme Court in the case of Orissa State Warehousing Corporation and Rajasthan State Warehousing Corporation Vs. CIT 237 ITR 589 has held that assessee is entitled to deduction in respect of income derived from letting of godowns and warehouses. We also observe that the total income of the assessee, as determined in the original order was Rs.11,31,84,636. Thus the AO has not allowed deduction in respect of the entire income. He h....

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.... the development of rural economy. In this case the object of providing such deduction to cooperative societies in respect of such income is fully met. It is not the case of the revenue that the AO had passed the order in undue haste without examining the relevant aspects of the case. Moreover, the claim of the assessee is also supported by the various judgments referred to above. The revenue has not led even a single case where such claim for deduction is held to be as not allowable thus such income qualified for deduction u/s 80P(2)(e) and the AO allowed the same after due application of mind and after making proper inquiries. In the light of these facts we do not find any error in the order of the AO. The AO look a reasonable view based ....