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TMI Blog2012 (6) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... odernizing the printing press - construction was done on the direction of the State Government – Held that:- claim of the assessee was not controverted by the revenue - expenditure was revenue in nature was clearly distinguishable as therein tenements constructed for welfare of employees did not vest in the asses- see and the assessee did not get any benefit of enduring nature - matter remanded to the Tribunal - 157, 158, 159 and 664 of 2005 - - - Dated:- 8-9-2010 - ADARSH KUMAR GOEL, AJAY KUMAR MITTAL, JJ. JUDGMENT Adarsh Kumar Goel J.- 1. This order will dispose of I. T. A. Nos. 157, 158, 159, 664 of 2005, 268, 477 of 2006, 419 of 2007, 275 and 276 of 2009, 246, 251 of 2010 and C. W. P. No. 1897 of 2005, as common questions of law are involved in all the appeals except one additional question each in I.T. A. Nos. 268 of 2006 and 276 of 2009. Common questions have been set out in I. T. A. No. 157 of 2005 as under : "(i) Whether, in the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law in allowing deduction under section 80P(2)(e) of the Act, when it has held that there is no provision in the main or eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant qua any receipt of income from godowns and ware- houses, was nothing but a business and commercial receipt which has nothing to do with the letting out of godowns as such and where the appellant was keeping/storing the goods purchased by it, which were subsequently sold to the FCI. May be the sale price of the sales made to the FCI were determined/controlled by the Government. All the same, the transaction remained as one of sale and it is to be so treated. Thus, from the very method of accounting adopted by the appellant, the income earned by the appellant was nothing but income from its normal business activities. Simple giving a different colour to any set of transaction for claiming any specific exemption, is not a good and allowable practice." 4. The finding recorded by the Tribunal is as under : "15. We will first consider as to whether deduction under section 80P(2)(e) is admissible in respect of the gross income derived by the assessee from storage/custody facilities. In this connection, it will be relevant to refer to section 80P, which reads as under : '80P.(1) Where, in the case of an assessee being a co-operative society, the gross total income i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 (SC). On the basis of the aforesaid decisions, we are of the considered view that in computing the eligible income, which is included in the gross total income, the proportionate administrative and office over- head expenses are to be taken into account. Accordingly, respectfully following the ratio of the above decisions, we hold that proportionate administrative and office overhead expenses are to be taken into account for the purpose of computation of deduction under section 80P(2)(e)." 5. We have heard learned counsel for the parties. 6. Learned counsel for the Revenue submitted that the Commissioner rightly held that income from storage could not be treated as income from "letting out" so as to attract section 80P(2)(e). He relies on the judgments of the hon'ble Supreme Court in A. Venkata Subbarao v. State of A. P., AIR 1965 SC 1773 and Udaipur Sahkari Upbhokta Thok Bhandar Ltd. v. CIT [2009] 315 ITR 21 (SC) and the Gujarat High Court in Surat Venkar Sahakari Sangh Limited v. CIT [1971] 79 ITR 722 (Guj). 7. Learned counsel for the assessee supports the view taken by the Tribunal. He submits that the judgments relied upon by the Revenue are distinguishable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or facilitating the marketing of commodities. If the godown is let out (including user) for any purpose besides storing, processing or facilitating the marketing of commodities, then, the assessee is not entitled to such exemption (see Law and Practice of Income-tax by Kanga and Palkhivala, Eighth Edition, page 995)." 11. In A. Venkata Subbarao v. State of A. P., AIR 1965 SC 1773, question was as to how the commission charged for storage for supply of goods to the Government as per a Control Order was considered and it was held that the commission so charged could not be held to be remuneration. After referring to the above judgment, it was observed (page 39 of 315 ITR) : "Applying the judgment of this court in the case of A. Venkata Subbarao, AIR 1965 SC 1773, we hold that the High Court was right in coming to the conclusion that the assessee was storing the commodities in question in its godowns as part of its own trading stock, hence, it was not entitled to claim deduction for such margin under section 80P(2)(e) of the 1961 Act." 12. Thus, the submission on behalf of the Revenue that exemption under section 80P(2)(e) is available only in respect of income from " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, pleaded that the Assessing Officer should be directed to allow the deduction as per law. The receipt of the donation was neither produced before the Assessing Officer at the time of assessment proceedings nor during the course of hearing before me. Therefore, it is held that the appellant is not entitled to deduction under section 80G of the Act. Hence, this ground of appeal is dismissed. 17. Reversing the said view, the Tribunal observed as under : 6. Ground No. 4 is relating to deduction under section 80G. The income of the assessee is partly exempt and partly liable to tax. The Assessing Officer has allowed deduction to the assessee under section 80G in proportion to the taxable income. Similar issue came up for consideration of the Tribunal in the assessee s own case for the assessment years 1995-96 and 1996-97 in I. T. A. Nos. 315 and 316/ Chandi/2000 and, vide order dated September 15, 2004, the same has been decided in favour of the assessee. We respectfully following the said decision of the Tribunal in the assessee s own case (supra) direct the Assessing Officer to allow deduction under section 80G out of the taxable income of the assessee. 18. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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