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TMI Blog2019 (10) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... a provision to promote development of Co-operative Sector. Considering the totality of the aforesaid facts and relying on the aforesaid decision of Hon ble Apex Court cited herein we are of the view that assessee is eligible for deduction u/s 80P2(b) on the milk sold to outside parties. The assessee would be eligible for the benefit of deduction u/s 80P(2)(b) on sale of milk at a price at which it has actually sold in the open market or price at which milk is sold to Federal Society, whichever is less. For the month of August, 2008, there is no sale of milk by the assessee to the Federal Society and the sale of ₹ 1,24,34,116/- is only to outsiders, hence, we are of the view that benefit of deduction should not be extended on sale of milk for the month of August, 2008. We therefore direct the AO to re-compute the deduction u/s 80P(2)(b) of the Act by excluding the sale made to outsiders in the month of August, 2009 - ITA No.2326/PUN/2017 Assessment year : 2009-10 - - - Dated:- 5-9-2019 - Shri Anil Chaturvedi, AM And Shri Vikas Awasthy, JM Assessee by : Shri C.V. Deshpande Shri Pramod Shingte. Revenue by : Shri Rajesh Gawli. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority. Apart from the aforesaid sales, he also noticed that assessee had made sales to the tune of ₹ 93,68,709/- which includes sale of allied Dudh products of ₹ 8,93,599/-, store material of ₹ 35,50,791/-, animal breading of ₹ 47,03,000/- to persons other than Federal Society, Government or local authority. AO was of the view that profits earned by the assessee from the sale of milk aggregating to ₹ 13,36,51,168/- made to persons not covered under Sec.80P(2)(b) of the Act, are not eligible for deduction. He accordingly re-worked the deduction u/s 80P(2)(b) at ₹ 11,29,038/- and disallowed the balance amount claimed as deduction. Aggrieved by the order of AO, the assessee carried the matter before Ld.CIT(A), who upheld the order of AO by observing as under :. 6. I have considered the submissions of the appellant with reference to the facts of the case. From the above submission it can be seen that the appellant has now claimed deduction under section 80P(2)(a)(iii). From a plain reading of section 80P it can be seen that the section classifies co-operative societies into different types. Where, on the one hand, clause (a) of section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahanand Dairy products and therefore advised the assessee not to send the entire milk to it. He submitted that in view of the aforesaid fact, assessee was forced to sell the milk to outside purchasers as the milk collected by the assessee has a very short shelf life and if the milk is not processed immediately, the entire milk would get spoiled. He therefore submitted that in such a situation for the reasons beyond the control of assessee, the assessee was forced to sell the milk to the outsiders. He submitted that in such situation, the assessee could not be denied the benefit of deduction u/s 80P(2) of the Act. In support of his contention about the inability of Mahanand Dairy to accept milk from the assessee, he placed on record copy of the letter bearing No.MND/02/DAIRY/Shirala tal-milk supply/18-19/D73 dated 15.12.2018, issued by the Dairy Manager, Mahanand Dairy. He further submitted that the sale made by the assessee to outside parties is not at a rate higher than the price at which the milk was sold to the Federal Society and therefore, it cannot be said that assessee, with the intention to claim higher price sold the milk to outside purchasers instead of selling the milk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to paucity of processing capacity at its end. The aforesaid contention of the assessee has not been controverted by Revenue. In such a situation, we are of the view that milk being a highly perishable item, its shelf life being very short, the assessee was left with no other alternative but to sell the milk to outside parties. The assessee has placed before us a chart showing the price at which it had sold milk in various months to outside parties and the Co-operative Society during the period relevant to A.Y. under appeal. A perusal of the same reveals that the price charged by the assessee from outside parties is lower than the price at which milk was sold to Federal Society in all the months, except in the month of August, 2009. As per the aforesaid table, it is seen that in the month of August, 2009 there is no sale of milk to Federal society, whereas the sale of milk to outside parties is to the tune of ₹ 1,25,54,116/-. We find force in the argument of the Ld.A.R. that it is not a case where assessee has sold the milk at a higher rate to outside parties, in fact assessee was getting higher price on sale of milk to Federal Society in addition to undisputed benefit of ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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