TaxTMI 
TaxTMI 
2025 (5) TMI 108
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....ls on sugarcane independently supplied by sugarcane growers in catchment area to sugar mills at rates determined by the state government, to conclude that such receipts were "business" receipts. 2. Whether the Ld. CIT(A) was right in directing deduction under section 80P in respect of such gross receipts from sugar mills, especially without giving finding of fact that such receipts were duly earned as business receipts. 3. That the appellant also craves to modify amend, change and revise the above grounds of appeal and add further grounds of appeal, if necessary." 2. As all these appeals are on a common issue, these appeals are being taken up for disposal, vide a common order. Appeal in ITA No. 243/Lkw/2020 in the case of M/s Cane Development Union, Balrampur for the Assessment Year 2014-15 is being taken as a lead case and our findings in the said case will apply mutatis mutandis to the other appeals. 2.1 It is also observed that there is a delay in the filing of some of the appeals by the Department mainly in ITA No. 34/Lkw/2021 (delay of 109 days), ITA No. 30/Lkw/2021 (delay of 108 days) and ITA No. 31/Lkw/2021 (delay of 149 days). However, the Department has filed a co....
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.... books were not reliable and correct. He also decided to initiate a penalty under section 271B for noncompliance of the provisions of section 44AB of the I.T. Act, 1961. On the issue of allowability of deduction under section 80P, the ld. AO rejected the claim of the assessee on account of the decision of Hon'ble High Court of Delhi in the case of Mantola Co-operative Thrifts and Credit Society vs. Commissioner of Income Tax in ITA No. 569/2013, wherein the Hon'ble High Court clarifying the position of applicability of exemption under section 80P(1) held that section 80P provides partial exemption restricted to the specified, "earning" or, "income" in sub section (2) and not the entire income. He quoted from the provisions of section 80P to point out that a cooperative society engaged in the marketing of agricultural produce grown by its members, shall qualify for deduction under this section with respect to the entire amount arising from profits and gains of its activities that are attributable to such work. On the other hand, income from other sources covered for income of every other kind which cannot be excluded from total income, if it is not chargeable to income tax under any....
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....e judgment of the Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Limited vs. Income Tax Officer (2010) 188 taxman 282 (SC) as,in his opinion, it was evident that the interest income received on FDRs were not attributable to the business of the assessee, which was engaged in the marketing of sugarcane produce and providing fertilizer and seed on discount basis to the farmers which were its members. However, with regard to commission income, the ld. CIT(A) held that the said income was different from the interest income as this income had clearly been derived by the assessee society from the activity of marketing of agricultural produce of its members. He noted that the assessee society had received commission in lieu of sale of sugars made by the cane growers to the sugar mills and for carrying out the developmental activities as specified under U.P. Sugarcane (Regulation of Supply & Purchases) Act, 1953 read with the U.P. Sugarcane (Regulation of Supply & Purchases) Rules, 1954. He, therefore, held that the assessee society was eligible to claim deduction under section 80P on commissioned income which it had derived from the marketing of agricultural produce ....
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....nd the Cooperative Cane Development Unions was on account of the activities that they performed and therefore, they were business receipts which were eligible for deduction under section 80P of the Act. He also submitted that the ld. CIT(A) while granting the relief had referred to the U.P. (Regulation of Supply and Purchases) Act, 1953 and the U.P. Sugar Cane (Regulation of Supply and Purchase) Rules, 1954 and therefore, it could not be said that he had not given a finding that the commission that was received was as a result of the business activities of the assessees. He, therefore, prayed that the orders of the ld. CIT(A) on the subject may be upheld. 7. We have duly considered the facts and circumstances of the case. In the very first instance, we find that the judgments that had been placed by the ld. AR are not relevant to the facts of the present case because the issue in those cases was with regard to allowance of deduction under section 80P in respect of interest income. We notice that the allowability or disallowance of interest income is not before us as a ground of appeal by the Revenue and the assessee has not filed any appeal on the disallowance that has been sustai....
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....s from a perusal of the Act and Rules, it is evident that the Cane Development Councils and the Cooperative Cane Development Unions play an important role in the Sugarcane production and supply within the areas that are assigned to them . The Act also lays down what payments are to be made to these bodies by the occupier of the factories. In section 18 of the said Act, it has been stated that the occupier of a factory or a Gud, Rab or Khandsari sugar manufacturing unit, shall make a contribution for every one maund of cane purchase by the factory or the Gud, Rub or Khandsari sugar manufacturing unit in the following manner; a. where the purchase is made through a Cane Growers Cooperative Society (Cane Cooperative Union), the contribution shall be payable to the society and the Council in the capital / fund thereof in such proportion as the State Government may declare so however, that the share payable to the Council shall not exceed 50%. b. where the purchase is made directly from the cane grower, the contribution in the fund shall be payable to the Council. 7.1 In the rules, with regard to payments, it had been pointed out in Rule 45 that the payments for the cane shall be m....