PR CIT Vs Surat Distric Co-Operative Milk Producers Union Ltd

Whether deduction u/s 80P(2)(d) can be allowed on the amount of interest and dividend earned on the investment / deposits with the other cooperative societies – YES: HC

Whether deduction u/s 80P(2)(d) can be allowed on the amount of interest and dividend earned on the investment / deposits with the other cooperative societies – YES: HC

 questions proposed by the Revenue are no longer res integra in view of the two decisions of Court. In the case of Commissioner of Income Tax III vs. Surat District Co. Op. Milk Producer Union Ltd, 2014-TIOL-2262-HC-AHM-IT, this Court held as under “4.1. In view of the aforesaid facts and circumstances and the decision of the Supreme Court in the case of Distributors (Baroda) P. Ltd vs. Union of India, 2002-TIOL-849-SC-IT-CB, we are in complete agreement with the view taken by the 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 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.”;

 in Commissioner of Income tax, Ahmedabad IV vs. Banaskantha Dist. Co. Op. Milk Producers’ Union Ltd, 2014-TIOL-584-HC-AHM-IT, this Court relied upon the Delhi High Court decision in the case of CIT vs. Kribhco, 2012-TIOL-551-HC-DEL-IT. The ratio of the two decisions is that Section 14A would have no application in respect of the income not being taxable on account of deduction under Section 80P(2)(d) of the Act. In view of this, no error of law could be said to have been committed by the Tribunal in passing the impugned order. The appeal, therefore, fails and is hereby dismissed.

– Revenue’s appeal dismissed : GUJARAT HIGH COURT

R/Tax Appeal No. 35 Of 2019