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Issues involved:
The judgment involves the interpretation of deduction under section 80P(2)(b) of the Income Tax Act, 1961 for a co-operative society engaged in supplying milk, specifically determining whether the society qualifies as a primary society for the purpose of the deduction. Details of the judgment: Issue 1: Deduction under section 80P(2)(b) for a co-operative society engaged in supplying milk The appeals were filed by the Revenue against the CIT(A)'s order granting deduction under section 80P(2)(b) to the co-operative society. The society claimed to be a primary society supplying milk, while the Revenue argued it was a federal society collecting milk from primary societies. The CIT(A) granted the exemption, leading to the appeals. Issue 2: Interpretation of "primary society" for deduction eligibility The key dispute was whether the co-operative society should be considered a primary society for the deduction under section 80P(2)(b). The Revenue contended that the society did not qualify as a primary society, while the society argued it met the criteria based on the Government order and its role as an intermediary between primary societies and State apex societies. Issue 3: Legal analysis and precedent Both parties presented arguments citing judicial pronouncements to support their positions. The Revenue relied on various court decisions to emphasize the criteria for exemption eligibility. The society's defense included references to Supreme Court and High Court judgments highlighting the need for a liberal interpretation of exemption provisions for co-operative societies. Conclusion: After considering the arguments and legal provisions, the Tribunal held that the co-operative society did not qualify as a primary society engaged in supplying milk as required by section 80P(2)(b). The Tribunal set aside the CIT(A)'s order and restored the assessing authority's decision, allowing all four appeals filed by the Revenue.
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