TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 316
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....e of milk and milk products. Assessee electronically filed its return of income for A.Y. 2009-10 on 03.09.2009 declaring total income at Rs. Nil after claiming deduction of Rs. 35,12,878/- U/S 80P(2) of the Act. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dt.31.10.2011 and the total income was determined at Rs. 23,33,840/-. The AO partially disallowed assessee's claim of deduction u/s 80P(2)(b) of the Act. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.25.07.2017 (in appeal No.SLI/241/11-12) dismissed the appeal of assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us and has raised the following grounds :....
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....,000/- to persons other than Federal Society, Government or local authority. AO was of the view that profits earned by the assessee from the sale of milk aggregating to Rs. 13,36,51,168/- made to persons not covered under Sec.80P(2)(b) of the Act, are not eligible for deduction. He accordingly re-worked the deduction u/s 80P(2)(b) at Rs. 11,29,038/- and disallowed the balance amount claimed as deduction. Aggrieved by the order of AO, the assessee carried the matter before Ld.CIT(A), who upheld the order of AO by observing as under :. "6. I have considered the submissions of the appellant with reference to the facts of the case. From the above submission it can be seen that the appellant has now claimed deduction under section 80P(2)(a)(i....
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....is finding of the assessing officer. The assessing officer is bound by the Income-tax Act and under the above circumstances he could not have allowed 100% of the claim of deduction. I find that the appellant has not complied with any of the sub-clauses (i), (ii) and (iii) of section 80P(2)(b) in order to make itself eligible for the claim deduction. In the circumstances, I hold that the assessing officer was justified in restricting the claim of deduction to only that portion of profits derived from sale of milk made to federal societies. Accordingly, this ground of appeal is dismissed. Aggrieved by the order of Ld.CIT(A), assessee is now before us. 4. Before us, Ld.A.R. reiterated the submissions made before AO and Ld.CIT(A). The Ld.A.R.....
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....f selling the milk to the Federal Society. In support of his aforesaid contention, the Ld.A.R. placed on record a tabulated statement indicating rate and quantity of milk sold to outside parties and the Federal Society. The ld.A.R. further relied on the decision of Hon'ble Apex Court in the case of Bajaj Tempo Limited Vs. CIT reported in (1992) 196 ITR 188 for the proposition that a provision in a taxing statute granting incentives for promoting growth and development should be construed liberally. 5. The ld. D.R. on the other hand submitted that Sec.80P(2)(b) of the Act contemplates that deduction can only be allowed to the extent of sale of milk made to the Federal Co-operative Society or Government or local authority or Government comp....
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....e society. Mahanand Dairy had advised the assessee not to send the milk to them as they would not be in a position to accept the milk due to paucity of processing capacity at its end. The aforesaid contention of the assessee has not been controverted by Revenue. In such a situation, we are of the view that milk being a highly perishable item, its shelf life being very short, the assessee was left with no other alternative but to sell the milk to outside parties. The assessee has placed before us a chart showing the price at which it had sold milk in various months to outside parties and the Co-operative Society during the period relevant to A.Y. under appeal. A perusal of the same reveals that the price charged by the assessee from outside ....