TaxTMI 
TaxTMI 
2017 (11) TMI 571
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....has deliberately claimed deduction u/s 80P(2)(a)(i) when the assessee was not eligible for deduction, which amounted to furnishing of inaccurate particulars of income and thereby concealment of income?" 3. However, the issue is now squarely covered by the decision of this Court in the case of assessee itself in Tax Appeal No. 80/2016 and Tax Appeal No. 81/2016 decided on 20th December, 2016. 4. The issue of quantum has also been decided in favour of the assessee holding as under:- 2. If the issue involved in the present group of cases is as to whether penalty under section 271 (1)(c) of the Act is sustainable in the facts of the present case. 3. That it is pertinent to note that on the merit of the issue namely as to whether the assessee is entitled to claim deduction under Section 80P of the Income Tax Act, this Court has held in favour of the assessee in D.B. Income Tax Appeal No.139/2002 in Commissioner of Income Tax, Bikaner vs. M/s Rajasthan Rajya Sahakari, decided on 01.09.2016, which reads as under:- 2.1 The case of the department is that the assessee claimed benefit under Section 80P(2) (a)(iv) & 80P(2)(d)of the Income Tax Act, 1961 which re....
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..... The Id. A.R. Submits that the assessee has received interest from other Co-operative Societies/Banks and after deduction the interest paid to State Government on loan, the net amount of interest amounting to Rs. 58,84,711.46 was shown as interest income and claimed as deduction u/s 80P(2)(d). This deduction was disallowed by the AO on the ground that the4 interest income has not been earned out of any investment but the same is a result of running current account with various Co-operative Banks, which cannot be held to be the investment. The CTT(A) has also confirmed the disallowance. He further submits that the interest income has been earned from short-term deposits with Co-operative Banks and Co-operative Societies and is fully exempted u/s 80P(2)(d). The CTT(A), in the subsequent assessment year, i.e., assessment year 1993-94, has allowed the same. The reliance was also placed upon the judgement of Hon'ble Punjab & Haryana High Court in the case of CTT vs. Haryana State Co-operative Housing Society (1998) 234 ITR 714." 4. Counsel for the Department, Mr. Sanjay Jhanwar, has drawn our attention to the provisions contained in Section 80P(2)(a)(iv) of the Income Tax ....
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....owers who were members of the cane growers unions were not the members of the Federation. In this context, it may be mentioned that in Clause (b) of Sub-section (2) of Section 80P, reference has been made to primary society as well as federated co-operative (societies which indicates that while enacting Section 80P was conscious of the 'distinction between the various types of co-operative societies that the functioning in the country, namely, the federated cooperative societies and primary societies. In Section 80P(2)(a)(i), when Parliament has used the expression "members", it has used it in the normal sense of a member of a co-operative society. The intention was to extend the exemption to co-operative societies directly extending credit facilities to its members. There is nothing in the said provisions to show that the intention was to grant exemption to cooperative societies which were extending credit facilities to persons, though not the members of the said society, were members of another co-operative society which is a member of the co-operative society seeking exemption. The meaning of the expression "members" cannot, therefore, be extended to include the members of a....
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....n held thus: 6. It may be mentioned here that after the apex Court had delivered the judgment in the case of Kerala State Co-operative Marketing Federation Ltd. (supra), the Parliament had amended the provisions of Section 80P(2)(a)(iii) of the Act by substituting the words "the marketing of agricultural produce grown by its members" by the IT (Second Amendment) Act, 1998, w.e.f. 1st April, 1968. The validity of the amendment has been upheld by the apex Court in the case ofNational Agricultural Co-operative Marketing Federation of India Ltd. and Anr. v. Union of India(2003) 181 CTR (SC) 1 : (2003) 260 ITR 548 (SC). However, no such amendment has been made in Clause (iv) of Section 80P(2)(a) of the Act which reads as follows : (2) The sums referred to in Sub-section (1) shall be the following, namely : (a) in the case of a co-operative society engaged in-- (i) to (iii) xxxxxxx (iv) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members. Thus, the interpretation placed by the apex Court in the case of Kerala State Cooperative Marketing F....
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....hat the business of rice mill, trucks and tractors, etc., is separate and divisible businesses and, therefore, relying upon the decision of the Gujarat High Court in the case of CIT vs. Sabarkantha Zilla Kharid Vechan Sangh Ltd. (1977) 107 ITR 447 (Guj) : TC26R.864, it was held that the income of the co-operative society from nontaxable activity has to be computed by setting off against the gross profit proportionate amount of expenditure. The claim of the assessee for allowing the entire expenditure on account of managerial and administrative expenses was not accepted. On the basis of the said decision of the Gujarat High Court, the proportionate expenses from the gross income of Rs. 4,60,385 were reduced to the extent of Rs. 3,10,253 and exemption was allowed for Rs. 1,50,132 only. In computing the expenses of Rs. 3,10,253 the total income shown on the credit side of the profit and loss account was taken into consideration and the total expenses on the debit side of the profit and loss account were taken into consideration and the proportionate expenses come to 67 per cent. Applying this 67 per cent to the figure of Rs. 4,60,385, the figure of Rs. 3,10,253 was arrived at which wa....
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....f interpretation applicable to a taxing statute is concerned, we can do no better than to quote the by-now classic words of Rowlatt J., in Cape Brandy Syndicate v. IRC (1921) 1 KB 64, 71: "...In a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used," 7. The principle laid down by Rowlatt J., has also been time and again approved and applied by the Supreme Court in different cases including the one, Hansraj Gordhandas vs. H.H. Dave, Assistant Collector of Central Excise and Customs, AIR 1970 SC 755, 759. 8. Sec.80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the cooperative society from its investment with any other cooperative society. This provisions does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the cooperative society from any investment with a cooperative society. It is immaterial whether any int....