2016 (12) TMI 402

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....ellant has positive income which was eligible for such claim of deduction u/s 80P of the Act. 3. Both the lower authorities have passed the orders without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. 4. The Id. CIT(A) has erred in law and on facts in confirming the action of Id. AO in charging interest u/s 234A/B/C/D of the Act. 5. The Id. CIT(A) has erred in law and on facts in confirming the action of Id. AO in initiating penalty proceedings u/s 271(l)(c) of the Act. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 2. Briefly stated facts are that assessee is a Co-op. Society engaged in the activities of providing credit facilities to its members and also running various godowns for storing various commodities. The return of income was filed on 14.09.2009 declaring NIL income. The case was selected for scrutiny assessment through CASS. Notice u/s 143(2....

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....deduction u/s.80P(2)(c) because before deduction u/s.80 P ss per ratio of Hon'ble Supreme Court in the case of Sabarkant Ziiia Khafid Veer, an Sanqh Lto. (supra) the deduction be allowed only after set off of loss and depreciation i.e. on net profit and gains. The appellant in reference to (a) above submitted that on similar facts disallowances were made in earlier years i.e. in A.Y.2007-08 and A.Y.2008-09. The Id.CIT(A) after consideration of facts end contentions in appeal No.CIT(A)XI /1127/Wd.7(1)/()9-1G vide order dated 28.02.2013 for A.Y.2007-08 and in appeal No. CiT(A)XIV/Wd.7(4)/305/2010-11 vide order dated 05.03.2013 for A.Y.2008- 09 allowed the appellant's appeal. The appellant distinguished the Hon'ble Supreme Court's judgement facts of Udaipur Sahkari Upbbhokta Thok Bhandar Ltd. (USUTBL) with the facts of appellant on the ground that in that case, the assessee was storing its own goods in the godown and was claiming deduction u/s.80P(2)(e) of the Act while in the case of appellant as per the object and bye laws of the society the rent income is received from the letting out the godown / warehouse to non members for the purpose of storage, processing or....

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.... u/s 80P(2)(e) of the Act by following the ratio of decision of Hon. Madras High Court in the case of South Arcot Dist. Co-op. Marketing Society Ltd.(SADCMSL) 92 ITR 371 which was upheld by Hon. Supreme Court. However, ld. CIT(A) has not adjudicated the ground completely because of the fact that during the year assessee has erred Rs. 11,40,187/- from letting out godown/warehouses for deduction u/s 80P(2)(e) of the Act was claimed whereas ld. CIT(A) has mentioned in his appellate order that assessee has not raised the ground and also not submitted the details in respect of other part i.e. if there is no positive income before allowance u/s 80P(2)(e) of the Act, then no such deduction u/s 80P(2)(e) of the Act can be allowed. Ld. AR further submitted that ld. CIT(A) has also observed that assessee has not raised ground so disallowance for such contention by Assessing Officer is upheld. Further it was submitted that the order of ld. CIT(A) is defective to the extent that on one place he is satisfied with the claim of deduction u/s 80P(2)(e) of the Act of income earned by assessee and in the very same order he has not quantified the deduction to be claimed by the assessee. Ld. AR furthe....

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....ome of co-operative societies. 80P (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in-sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely :- (e) in respect of any income derived by the co-operative society from the Jetting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income; As can be seen above, there does not appear to be any requirement that the godowns and warehouses should be given to the members of co-operative society to get deduction u/s. 80P(2)(e) of the I. T. Act, 1961. The principle of mutuality is not relevant for deduction u/s. 80P(2)(e). In view of the ratio laid down by Madras High Court and confirmed by Apex Court, it is decided that the appellant is eligible for deduction u/s, 80P(2) (e) of the I. T. Act, 1961. In view of above facts, I am inclined to accept the submission made by ihe appellant, and ....

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.... 2007-08 and 2008-09 we observe that ld. CIT(A) for Asst. Year 2009-10 has consistently followed the decisions of his predecessor by observing that deduction u/s 80P(2)(e) of the Act can be claimed by assessee even if the income from letting out godowns or warehouses is received from non-members. 12. Now analyzing the facts we find that in the computation of income placed at pages 53 & 54 of the paper book assessee has declared positive income at Rs. 11.40,187/- under the head "income from house property" for letting out of godowns/warehouses and gross total income at Rs. 19,11,642/- which inter alia also includes income from dividend and interest at Rs. 11,88,187/- which is eligible for deduction u/s 80P(2)(d) of the Act and there remains positive income from letting out godown/warehouses which is eligible for deduction u/s 80P(2)(e) of the Act. 13. From going through the order of ld. CIT(A) we find that he has agreed to the contentions of assessee for being eligible to claim deduction u/s 80P(2)(e) but while deciding the quantum of appeal it seems that he has not adjudicated the issue in the right perspective because in his appellate order he has mentioned that "appellant h....