9911796707
TMI Blog2022 (3) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... st be held to be a warehouse for the purpose of section 80P and we hold so. At this stage, we also note that the section 80P is a beneficial provision and the purpose is to incentivize the warehousing activity of co-operative societies. Therefore, the interpretation of section 80P must be liberal so as to advance the avowed objective. Taking into account all these aspects, we are persuaded to conclude that the income from letting of CAP storage derived by the assessee is eligible for deduction u/s 80P and there is no justification in denying the same to the assessee. Therefore, we delete the disallowance made by lower authorities. This ground is, therefore, allowed. Disallowance of claim of deduction u/s 80P on account of depreciation (protective) - HELD THAT:- We observe that the depreciation disallowance of ₹ 1,63,23,529/- has been fully deleted by the Ld. CIT(A) and this deletion has already attained finality as there is no appeal or cross-objection from Revenue contesting this. Regarding the disallowance out of deduction u/s 80P, we have already deleted the same in preceding paras. Thus both of the disputes, namely the disallowance of depreciation u/s 32 and disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,23,957/- and confirmed the protective disallowance partly to the extent of ₹ 1,18,52,613/-. Being aggrieved by the order of Ld. CIT(A), the assessee has preferred this appeal and now before us. 4. Ground No. 1: 4.1 The issue involved in this Ground relates to the disallowance of deduction u/s 80P to the extent of ₹ 5,02,23,957/- pertaining to the income from CAP storage. 4.2 During assessment proceeding, the Ld. AO observed that the assessee has claimed a total deduction of ₹ 33,43,57,235/- u/s 80P out of which the deduction to the extent of ₹ 5,02,23,957/- related to the income from the letting of CAP storage. The Ld. AO observed that section 80P(2)(e) allows deduction in respect of income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities. The Ld. AO further observed that the CAP storage is merely an improvised arrangement for storage of food grains which was born of necessity because harvests increased faster than the storage capacity over the time, but there is no construction of permanent structure involved in the CAP storage. According to the Ld. AO, therefore, the CAP stor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground level. Such plinth is enclosed by a waterproof cover. The cover is held down by nets and nylon lashing. Thus CAP storage is a protected place or protected enclosure for storage of commodities. (ii) CAP storage is a legally approved storage. The Ld. A/R invited our attention to Page No. 15 of the Paper-Book where an order bearing No. 7146/Khadya-Uparjan/2012 dated 08.10.2012 issued by Joint Director, Khadya, Nagrik Apurti evam Upbhokta Sanrashan Sanchalanalay, Madhy Pradesh, Bhopal is placed. In this order, the concerned authorities of State Govt. of Bhopal have given approval for construction of CAP storage. In the opening sentence of this Order, it has been clearly stated that CAP storage is being approved for storage of grains. (iii) The CAP storage are constructed and operated under controlled conditions as per directives formulated in this regard. The Ld. A/R invited our attention to Page No. 26 of the Paper-Book where an order bearing No. Bhandaran/01/4830/2020 dated 26.11.2020 issued by the Madhya Pradesh State Co-operative Marketing Federation Limited, Bhopal is placed. This order contains as many as 28 instructions and directions for construction and opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the years, with such modification of the current meaning of its language as will now give effect to the original legislative intention. The reality and effect of dynamic processing provides the gradual adjustment. It is constituted by judicial interpretation, year in and year out. It also comprises processing by executive officials. Relying upon this, the Ld. A/R submitted that the construction of section 80P should also done be in an updated manner so as to encompass the CAP storage within the fold of warehouse, because CAP storage is a modern form of warehousing developed due to the need of hour. 4.7 The Ld. A/R also submitted that the Ld. CIT(A) has wrongly placed reliance on (i) CIT Vs. Ahmedabad Maskati Cloth Dealers Co-operative Warehouses Society Ltd. (1986) 162 ITR 142 (Guj) and, (ii) Surat Vankar Sahakari Sangh Ltd. Vs. CIT (1971) 79 IT 722 (Guj). In those decisions, the assessees had let out godowns and warehouses for a purpose other than storage, processing or facilitating the marketing of commodities and therefore the deduction u/s 80P was not allowable. In the present case, there is no such dispute. 4.8 With above submissions, the Ld. A/R strongly argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, we delete the disallowance made by lower authorities. This ground is, therefore, allowed. 5. Ground No. 2: 5.1 In this ground, the assessee has challenged the protective disallowance of ₹ 1,18,52,613/- out of deduction u/s 80P confirmed by the Ld. CIT(A). 5.2 Facts as noted in the beginning and once again being repeated to understand this ground smoothly are such that while filing return, the assessee claimed depreciation u/s 32 of ₹ 1,60,23,529/- and deduction u/s 80P of ₹ 33,43,57,235/-. While completing assessment, the Ld. AO disallowed the deduction of depreciation of ₹ 1,60,23,529/- fully. Out of the deduction of ₹ 33,43,57,235/- u/s 80P, the Ld. AO made a part-disallowance of ₹ 5,02,23,957/-and allowed the remaining deduction of ₹ 28,41,33,278/-. Thereafter, in respect of the allowed portion of deduction u/s 80P amounting to ₹ 28,41,33,278/-, the Ld. AO also made a protective disallowance of ₹ 1,63,23,529/- on account of consequential effect of the equal amount of depreciation-disallowance already made. During first appellate proceeding, the Ld. CIT(A) deleted the disallowance of depreciation of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
