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TMI Blog2019 (10) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 and 2015-16, respectively. Before me, both the parties submitted that though the appeals are for two different assessment years but the issue involved in both the appeals are identical except for the assessment year and the amounts involved. They therefore submitted that they have common arguments for both the years. In view of the aforesaid facts, I, for the sake of convenience proceed to dispose of both the appeals by a consolidated order but however proceed with narrating the facts for assessment year 2014-15. ITA No. 2215/PUN/2017, (A.Y. 2014-15) 2. The relevant facts as culled out from the material on record are as under :- Assessee is a Co-operative Society registered under the Co-operative Societies Act. The society is engaged in the business of collecting milk from primary societies and supplying the same to federal society as well as non-federal parties. The assessee filed its return of income for A.Y. 2014-15 on 29-11-2014 declaring total income at Nil by claiming deduction of ₹ 43,36,867/- u/s. 80P of the Act. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 26-10-2016 and the total income was det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, restricted the deduction u/s. 80P to 5.11% of the net profit and accordingly worked out the deduction u/s. 80P(2)(b) at ₹ 2,21,612/- as against the assessee's claim of ₹ 43,36,867/-. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the CIT(A) who upheld the order of Assessing Officer. Aggrieved by the order of CIT(A), the assessee is now in appeal. 4. Before me, the ld. AR reiterated the submissions made by before Assessing Officer and CIT(A) and further submitted that the Mahananda is a state level milk sanstha and its capacity is 1000000 liters per day. Excess over this capacity cannot be purchased by the Mahananda as there are more than 100 members of this federal society and every member is ready to supply the milk. As the collection capacity of the federal society is insufficient to purchase milk from every member of the society, Mahahanda has permitted members to sell the milk to other customers. He submitted that though the assessee was ready to supply the entire milk to Mahananda but due to the limitation of the capacity of Mahananda and due to the highly perishable nature of the goods, assessee could not sell the entire m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old by the assessee to other than federal society. I find that identical issue arose before the Co-ordinate Bench of Tribunal in the case of Fattesinghrao Naik (Appa) Sahakari Dudh Utpadak Sangh Limited Vs. ITO (supra) wherein the Co-ordinate Bench of Tribunal decided the issue in favour of assessee but however for quantification of deduction, remitted the issue back to the file of Assessing Officer by observing as under : "6. We have heard the rival submissions and perused the material on record. The issue in the present appeal is with respect to claim of deduction u/s 80P(2)(b) of the Act. It is an undisputed fact that assessee is a Co-operative Society engaged in the business of collecting milk from farmers / primary societies and supplying the same to Federal Societies as well as non-federal parties. It is an undisputed fact that for the year under consideration assessee society has made sale of milk and other milk products to the tune of ₹ 13,56,51,168/- to the parties which are not covered under the provisions of Sec.80P(2)(b) of the Act. Provisions of Sec.80P(2)(b) contemplates that deduction can be claimed on the amount of gains of business of a co-operative society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objective of the section and not to frustrate it. It is an undisputed position that provisions of deduction u/s 80P is 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) of the Act on the milk sold to outside parties. However, 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. Thus, the ground No.1 of the assessee is partly allowed." 7. Since, the facts in the present case are identical to that in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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