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TMI Blog2013 (9) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction of the assessee u/s. 80IB of the Act. Disallowance of deduction u/s. 80P(2)(d) - Held that:- The only requirement was that income should be received from investment in co-operative societies and co-operative banks. Since in the present case, it was undisputed fact that income claimed u/s. 80P(2)(d) was received from the investment made in co-operative societies and co-operative banks, therefore assessee was eligible for deduction u/s. 80P(2)(d) of the Act. We further find that even otherwise since assessee was having mixed funds and the interest free funds were more than investment in co-operative banks and co-operative societies no disallowance was called for from eligible deduction u/s 80P(2(d) of the Act. - ITA No. 2613/Ahd/2012 & CO No. 21/Ahd/2013 - - - Dated:- 27-9-2013 - Sri D.K Tyagi, Judicial Member and Shri Anil Chaturvedi, Accountant Member For the Appellant: Sri O.P. Batheja, Sr.D.R. For the Respondent: Sri Yogesh G. Shah, A.R. ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- This is the revenue s appeal and CO of assessee against the order of Ld. CIT(A)-VIII dated 22-08-2012. First we will take up revenue s appeal in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -01 and claimed the deduction u/s. 801B from that year after satisfying all the conditions of new Industrial undertaking. (2) During the year, the appellant had claimed the following deduction u/s 80IB in respect of each unit as under: 0 Paneer Unit : ₹ 1,16,62,076/- o ShriKhand Unit ₹ 1,20,62,755/- o Dahi Unit : ₹ 46,56,801/- (3) The AO had issued the show cause notice asking as to why expenses and income should not be reallocated proportionately on the basis of details submitted. However without reallocating the income and expenses or without finding or proving the defect in allocation made by the appellant he just disallowed 50% of deduction claimed by the appellant without providing any basis for such disallowance of 50%. (4) The AO has disallowed the deduction claimed u/s. 80IB on following grounds. (i) As per the provisions of section 80IB of the Act, it is mandatory for the appellant to submit separate audited Profit and Loss account and Balance Sheet for each undertaking in respect of which deduction u/s. 80-IB is claimed. (ii) Appellant has incurred huge loss continuously in respect of undertaking in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allocated on the basis of sales ratio. (6) The AO has alleged that appellant has shown the loss in the cattle feed by allocating more expenses to plant which is not eligible for deduction u/s. 80IB. In this regard appellant submits that as mentioned above cattle feed plant is physically separate plant from dairy plant. Therefore, its expenditure and income are actual expenditure and income. There is no common expense hence question of allocation of more or less expenditure does not arise. Its books of accounts are also maintained separately. He also alleged that out of the total closing stock of finished goods of ₹ 565 Lacs, only stock of ₹ 6 Lacs have been shown for cattle feed plant and thereby increased the loss of the unit. In this regard appellant submits that it is actual closing stock of cattle feed plant. Remaining stocks are pertaining to other plants. In the cattle feed plant there is always shortage of supply hence always stocks inventories are lower. Further at the end of every financial year, production is closed for some period due to physical verification against which sale is continued; hence stock at the end of the year is always maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provisions, it is required that along with return of income the report in prescribed form should be filed. In present case we have filed the form No. 10CCB for all the three units i.e. Paneer, Shrikand and Dahi separately. The copy of which is enclosed herewith (Page 23 to 53). Along with above said report profit and loss account of each unit along with basis of allocation of expenses and income was also filed. The copy of which submitted before your Honour along with earlier submissions. In view of the above, your Honour would appreciate that it cannot be said that we have not complied with requirement of the section. The AO cannot disallow the deduction on that basis. 6. After taking into consideration the submission of the assessee and the case laws Ld. CIT(A) deleted this addition. 7. Before us Ld DR relied on AO s order while learned counsel of the assessee relied on the order of Ld. CIT(A). 8. After hearing both the parties and perusing the record, we find that assessee is in the business of manufacturing various milk products like Paneer, Shrikhand Dahi etc since so many years. There are different undertakings of the assessee which are grouped under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO regarding huge losses incurred in non-eligible unit was also found not on sound basis by the Ld. CIT(A) as cattle feed plant was physically separate unit and allocation of common expenses out of dairy business with it did not arise. The AO had disallowed the expenses on estimated basis only without finding any specific defect in the allocation of expenses done by the assessee which was done by the assessee on the same line as was done in earlier years which were accepted by the revenue over the years so applying the rule of consistency Ld. CIT(A) has rightly directed the AO to delete the disallowance of ₹ 1,41,90,816/- rejecting the claim of deduction of the assessee u/s. 80IB of the Act. This ground of the revenue is dismissed. 9. Second ground of revenue s appeal relates to disallowance of deduction u/s. 80P(2)(d) of the Act. During the assessment proceedings, AO observed that assessee has claimed deduction of ₹ 2,51,35,500 u/s. 80P(2)(d) of the Act in respect of interest and dividend earned from cooperative societies and banks during the year under appeal. AO disallowed an amount equivalent to 50% of interest expenses out of the claim of the assessee on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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