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TMI Blog2018 (12) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment of the Cooperative society". Further it is also noticed that assessee has explained that an individual shareholder cannot have beneficial interest of more than 0.05% in the shares of the co-operative society. It is also noticed that authorized capital in the case of assessee was 5 Cr. and an individual member cannot subscribe more than 25,000/- worth of shares, without approval from the Government. These facts were not disputed/disproved by the AO. We are of the view that the provisions of section 40(A)2(b) are not applicable to co-operative society. Therefore, we are inclined with the decision of CIT(A), that the provision of section 40(A)2(b) of the Act, were not applicable to the case of the assessee, therefore we do not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(b) of the Act. Thereafter, the Assessing Officer has issued a show cause notice to the assessee to explain why not excess price of sugarcane given to the farmers should not be disallowed as per the provision of section 40A(2)(b) of the Act. In this regard the assessee responded that the section 40A(2)(b) is not applicable to the co-operative society, thereafter any amount paid to the members of the society over and above the Statutory minimum price of sugarcane paid to the farmers should not be disallowed as per the provisions of section 40A(2)(b) of the Act. The Assessing Officer has not accepted the explanation of the assessee stating that Statutory minimum price of sugarcane has been fixed at ₹ 94.68 per quintal whereas assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act. A Cooperative society is a voluntary AOP, it is economic institution formed for social purpose and not motivated by entrepreneurial profits by distinguishes from the association of business''. The Co-ordinate Bench of ITAT has held that the provisions of section 40A(2)(b) of the Act, does not apply to co-operative society. Hence, no disallowance under that section can be made in the assessment of co-operative society. The Hon'ble Bombay High Court also in the case of CIT vs Manjara Shetkari Sahakari Sakhar Karkhana Ltd.(supra) has held that ''the section 40A(2) does not apply to the co-operative society, hence no disallowance under that section can be made in the assessment of the Cooperative society''. Further it is also noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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