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TMI Blog2009 (2) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... he above claims. The Commissioner of Income-tax (Appeals), upheld the Assessing Officer’s orders on both the issues. The Tribunal held that the interest earned from members of the assessee co-operative society on advances/credit facilities provided to them would be eligible for deduction under section 80P(2) (a) (i). The Tribunal further held that where the earlier centrifugal machine unit was demolished and a new unit installed in its place, and the ECT crane was brought in as a substitute of earlier manual machines, it is clearly a case of replacement, and accordingly allowed the appeal. held that- (i) the requisite details in order to claim exemption and the necessary proof that the co-operative society was engaged in carrying on any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as follows 3. The assessee is a co-operative society running a sugar factory. For the assessment year 1988-89, the assessee claimed expenditure including replacement of complete centrifugal machine unit, ECT crane unit and cane carrier including erection charges as maintenance expenditure. For the assessment years 1988-89, 1989-90 and 1990-91 the assessee claimed the benefit of section 80P(2) on interest earned from its members on advances/credit facilities. The Assessing Officer disallowed the above claims. 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeals before the Commissioner of Income-tax (Appeals), who upheld the Assessing Officer's orders on both the issues. The assessee filed a second appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Co-operative Sugar Mills Ltd., Ambur Co-operative Sugar Mills Ltd., Dharmapuri District Co-operative Sugar Mills Ltd., Vellore Co-operative Sugar Mills Ltd., Attur Agricultural Producers Co-operative Society Ltd., and Modem Engineers Constructions Co-operative Society Ltd. Under section 80P(1), deduction in respect of income of co-operative societies is provided for. Under section 80P(1), where the gross total income of a co-operative society includes any income referred to in sub-section (2) then the sums specified in sub-section (2) shall be deducted from the gross total income to arrive at the total income of the assessee society. In order to earn exemption under section 80P(2) a co-operative society must prove that it had engaged its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income-tax (Appeals) to the effect that the earlier centrifugal machine unit was demolished and in its place a new unit was installed. It is clearly a case of replacement. The ECT crane unit and cane carrier unit apparently were brought in substitution of the earlier manual or other primitive method of movement of goods or manufacturing process. What the crane does is to lift sugar from one place and move it to another place. But there is no evidence as to whether in such process any increase in the production capacity. 10. In the decision of the Supreme Court in the case of CIT v. Ramaraju Surgical Cotton Mills reported in [2007] 294 ITR 328, the judgment of this court in CIT v. Janakiram Mills Ltd. reported in [2005] 275 ITR 403 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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