TaxTMI 
TaxTMI 
2019 (7) TMI 1094
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....the disallowance without appreciating the facts that share capital / reserve of the assessee are less than such investment to prove which assessee has used borrowed funds for such investment / FDs?" 3 The assessee is a cooperative society registered under the Gujarat Cooperative Societies Act, 1961. The assessee is in the business of procuring milk, processing milk, manufacturing of milk products and distribution of milk and milk products in the district of Surat. The assessee claimed deduction under Section 80P(2)(d) of the Act under the following heads: "1. Interest income from cooperative banks 2. Dividend income received during the year" 4 The Assessing Officer declined the deduction holding as under: "3.6 The condition and submission of the assessee is considered carefully and not found acceptable on the following reasoning. Sec. 14A is applicable in such cases where part of the income is not included in the total income. Sec. 14A does not speak of income which is except from taxation. On the other hand, it speaks of income which is not included in the total income. The total income is defined under S. 2(45) of the Act and there is distinction between the gross to....
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....overing issue in the case of the appellant. The appeals filed before me for the earlier Asstt. Years 200607, 2007-08 & 2008-09 having the identical issues had already been decided in favour of the appellant society. In view the identical set of facts and circumstances of the case as in the earlier years, the addition made on this account is hereby deleted and this ground of appeal is allowed." 6 The Revenue preferred appeal before the Appellate Tribunal. The Appellate Tribunal, while dismissing the appeal preferred by the Revenue, held as under: "9...Therefore, it was contended that the present appeal is squarely covered and also to be decided in favour of the assessee society. Ln support of his contentions the ld. AR has also relied on the following cases CIT vs Kribhco [2012] 252 ITR (Del) 374, CIT VS. Kings Export [2009] 318 ITR 100 (P & H), ACIT vs. Osmanabad Janta Bank Ltd. [2013] 152 TTJ (Pune) [UO1, JCIT vs. American Express Bank Ltd. [2012] 149 TTJ 683 Mumbai. It was further submitted that decision of Punjab State Cooperative Milk Producers Federation Ltd. vs. ITO, ITAT Chandigarh (supra) is not applicable. As in this case shares and deposits are permitted u/s.71 of th....
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....On such investment the appellant had been receiving interest and dividend which had been claimed as deduction 80P(2)(d). It is not a case that appellant had either earned income or borrowed fund and invested in this investment and deposits. 4s claimed by the ld. Sr.D.R that these details were submitted before Id. ClT(A) not before the AO. is not acceptable. The appellant had given all the details before the A.O. on which ld.A.O. concluded otherwise. The balance sheet as well as p & l account were available in all the years that the A. 0. gave these figures on which the Id. ClT(A) relied upon, had taken from either balance sheet or p&l account. Thus, there is no additional evidence submitted by the appellant before the CIT(A) in A.Y. 2006-07. We dismiss the appeal on ground no.1 in A.Y.06-07. Further the A.O. considered Hon'ble Supreme Court decision in Distributors (baroda) P. Ltd. vs. Union of India [1985] 155 ITR 120 (SC), wherein, it was held that deduction u/s.80M is to be calculated with reference to amount on dividend computed in accordance with the provisions of the Act and forming on the gross total income and not with reference to full amount of dividend received by th....
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....nion Ltd [Tax Appeal No.410 of 2014 and allied appeals] decided on 10th June 2014], this Court held as under: "4.1. In view of the aforesaid facts and circumstances and the decision of the Hon'ble Supreme Court in the case of Distributors (Baroda) P. Ltd vs. Union of India reported in (1985) 155 ITR 120 (SC), we are in complete agreement with the view taken by the learned Tribunal allowing the deduction to the assessee under Section 80P(2)(d) of the Act on the amount of interest and dividend earned on the investment / deposits with the other cooperative societies. We see no reason to interfere with the impugned judgment and order passed by the learned Tribunal. Under the circumstances, in all these appeals with respect to grant of deduction under Section 80P(2)(d) of the Act is held against the revenue." 8 In Commissioner of Incometax, Ahmedabad IV vs. Banaskantha Dist. Co. Op. Milk Producers' Union Ltd. reported in [2014] 45 taxmann.com 152 (Gujarat), this Court relied upon the Delhi High Court decision in the case of CIT vs. Kribhco [2012] 349 ITR 618. The ratio of the two decisions is that Section 14A would have no application in respect of the income not being taxabl....