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TMI Blog2012 (7) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer for proper verification - matter remanded back to the file of the Assessing Officer - appeal of revenue is allowed for statistical purposes. - ITA No.2312/Mds./2006 - - - Dated:- 25-5-2012 - SHRI N.S.SAINI, SHRI CHALLA NAGENDRA PRASAD, JJ. Appellant by : Shri Anirudh Rai C.I.T. DR Respondent by : Shri R.Venkatanarayn O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER: This is an appeal filed by the Revenue against the order of Commissioner of Income Tax(Appeals),Salem dated 15.09.2006 for Assessment Year 1998-99. 2. The sole grievance of the Revenue in this appeal is that Commissioner of Income Tax(A) erred in directing to allow deduction under Section 80 P (2)(d) without considering the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court. He therefore, disallowed the deduction of Rs.41,96,242/- under Section 80P(2)(d) and deduction of Rs.11,50,786/- under Section 80P(2)(a)(i). 5. On appeal, the Commissioner of Income Tax(Appeals) observed that the assessee has earned interest on advances to its members of Rs.11,50,786/- for which deduction is allowable under Section 80P(2)(a)(i). He also observed that the assessee has earned interest from other sister co-operative sugar mills of Rs.41,96,242/-, which was allowable deduction to the assessee under Section 80P(2)(d) of the Act. He observed that deduction was allowable to the assessee in view of the decision of Hon ble Madras High Court in the case of the assessee for Assessment Year 1994-95 and hence, delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on the ground that the decision of Hon ble Madras High Court in favour of the assessee in the Assessment Year 1994-95 was not accepted by the Department and the Department has preferred a SLP before the Hon ble Supreme Court. On further appeal, the Commissioner of Income Tax(Appeals) following the decision of Hon ble Madras High Court, allowed the claim of deduction to the assessee, which was confirmed in appeal by the Tribunal. The Department filed further appeal to the Hon ble Madras High Court and Hon ble Madras High Court restored the matter back to the Tribunal for fresh adjudication of the issue in the light of the decision of Hon ble Supreme Court in the case of C.I.T. Vs. Ponni Sugars and Chemicals Ltd.(supra). We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Co-operative Society Ltd. and Modem Engineers Construction Cooperative 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 assesseesociety. In order to earn exemption under section 80P(2)a cooperative society must prove that it had engaged itself in carrying on any of the several businesses referred to in subITA. section (2). In that connection, it is important to note that under sub-section (2), in the context of co-operative societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association, Articles of Association and other relevant documents in the light of the observation of the Hon'ble Supreme Court in the case of Ponni Sugars and Chemicals Ltd (supra) and after taking into consideration the decision of the Tribunal in the case of M/s Modern Engineers Construction Co-op. Society (supra). Needless to mention that the Assessing Officer shall allow reasonable opportunity of hearing to the assessee before adjudicating the issue afresh. Thus, the grounds of appeals of the Revenue are allowed for statistical purposes. The facts being identical, respectfully following the precedent, we set aside the order of the lower authorites and remit the matter back to the file of the Assessing Officer with the very same dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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