TaxTMI 
TaxTMI 
2020 (8) TMI 564
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.... assessee's claim for deduction under section 80p(2)(d) of the Income Tax Act, 1961(hereinafter called 'the Act') in respect of bonus received by the assessee from M/s. Karnataka Co-operative Milk Producers' Federation (KMF) of Rs. 22,67,980/-. 2. In the course of hearing, learned AR of the assessee submitted that the terms used in section 80p(2)(d) of the Act are interest or dividend derived by the Co-operative Society from its investments with any other Co-operative Society. Regarding this aspect that the investments of the assessee society is KMF, she submitted that the balance sheet of the assessee society is available on page 40 of the Paper Book as per which there is investment of Rs. 7,70,53,491/- and the details of these investment....
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....venue supported the order of CIT(A). 3. We have considered the rival submissions. First of all, we reproduce the provisions of section 80p(2)(d) of the Act which are as under: ".................. (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;" 4. Now we reproduce the relevant paras of Bye Law of KMF which is at paras 32 and 33 on pages 92 and 93 of the Paper Book. "32.0 Distribution of Profits: To distribute net profit, the following procedure shall be adopted All interest accrued due, but not actually realised shall be deducted from the gross profits for the year, before the net profits are arrived....
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.... by a society from its investment in any other society is eligible for deduction under section 80p(2)(d) of the Act and this is the stand of the AO and the CIT(A) that out of the dividend received by the assessee from KMF is eligible for deduction under section 80p(2)(d) of the Act but the amount of bonus received by the assessee from KMF is not eligible for deduction under section 80p(2)(d) of the Act. Hence, we have to decide this aspect as to whether the nature of bonus income received by the assessee from KMF can be considered as dividend received from KMF or not. In this regard, we find that Rules 33 and 34 of the Bye Law of the KMF as reproduced above are relevant in this regard. We find that as per these Rules, 25% of the profit is ....