TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 175
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....ed income on the ground that the assessee was not entitled to claim deduction. 2] The learned CIT(A) erred in holding that the assessee society was not engaged in the activity of 'cottage industry' and hence, it was not eligible to claim the deduction u/s 80P(2)(a)(ii) of the Act. 3] The assessee submits that it was engaged in collective disposal of the labour of its members and hence, the income assessed of Rs. 25,94,010/- was eligible for deduction u/s.80P(2)(a)(vi) of the Act. 4] The learned CIT(A) erred in confirming the disallowance u/s 40A(3) of Rs. 8,44,200/- without appreciating that the said disallowance was not warranted on facts of the case. 5] The learned CIT(A) erred in confirming the disallowance u/s 40(a)(ia) ....
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....8,44,200/- and under section 40(a)(ia) of the Act at Rs. 59,000/-. The assessee is also in appeal against the addition under section 68 of the Act at Rs. 3,79,500/- by way of ground of appeal No.6. The assessee without prejudice to the above grounds of appeal have also made an alternate claim that in case the deduction under section 80P(2)(a)(ii) is granted to the assessee, then the deduction is to be allowed in respect of additions sustained, by way of ground of appeal No.7. 5. Briefly, in the facts of the case, the assessee is a Co-operative society claimed to be engaged in the business of cottage industries. For the year under consideration, the assessee had furnished the return of income declaring Nil income after claiming deduction un....
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....e assessment order, facts of the case and the submission of the appellant. The AO in the assessment order has denied deduction u/s 80P(2)(a)(ii), 80P(2)(a)(iii) and 80P(2)(a)(iv) as claimed by the appellant in its return of income. The AO was of the view that the appellant co-operative society is not engaged in any of the activities mentioned in section 80P(2)(a) of the Act. The appellant in its statement of accounts has claimed that it was engaged in the business of cottage industries, marketing of the agricultural produce grown by its members, purchase of agricultural implements, seeds, livestock, or other articles intended for agricultural for the purpose of supplying them to its members. However, a perusal of the details available on as....
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.... the State Government for collective disposal of labour and produce labour muster and details of payments made to them. The appellant was also given an opportunity to furnish justification for claiming deduction u/s 80P(2)(a) of the Act. The appellant, however, could not furnish any material in support of its claim for deduction u/s 80P(2)(a) of the Act. It continued to say that it was engaged in cottage industries and claimed deduction u/s 80P(2)(a)(ii) of the Act. One of the conditions for cottage industry is that it must carry on the activity of manufacture, production or processing and it should not be engaged merely in trading i.e. purchase and sale of the same commodity. A perusal of the submissions and the material available on recor....
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.... in this regard. 8. Another aspect noted by the CIT(A) from the perusal of Profit & Loss Account was that the assessee was engaged in various PWD related contracts for earning income on account of providing training under various schemes. Accordingly, the order of CIT(A) is upheld in denying the claim of deduction under section 80P(2)(a)(ii) of the Act. 9. In respect of other claims made in the grounds of appeal under section 80P(2)(a)(vi) of the Act, no plea has been raised before the authorities below except for claiming deduction under section 80P(2)(a)(ii) of the Act and hence, the same also is rejected. The grounds of appeal No.1 to 3 are thus, dismissed. 10. In respect of next issue vide ground of appeal No.4 i.e. disallowance unde....