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TMI Blog2023 (1) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... aid activities deserve to be exempt u/s. 80P(2)(a)(iv) Grants received from State Government it was contended that the same was passed to members of the society and the Ld. CIT(A) directed to the AO ascertain if these grants have indeed been passed to the members of the society. To that extent these grants have been distributed to the members then they should be allowed to be deducted. CIT(A) has directed the AO to verify the claim of the assessee and we are unable to see any ambiguity in this regard. Commission income, entry fee, other income, patte (satte) se income , Upaj Badhotri and Vasooli Kharcha - On a careful perusal of the first appellate order we observe that the AO merely alleged that if the assessee takes sale/purchase of agricultural produce by its members then it must be shown in trading account, while no such transactions has been shown in the trading account maintained by the assessee. AO alleged that the account maintain by the assessee are defective and not audited u/s. 44AB - CIT(A) after considering the explanation and submissions of the assessee that wherein it was submitted that from the details mentioned it is clear that the activity of supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion could be made in the case of showing or declaring lesser commission in comparison to the quantum of sale but when the assessee is disclosing entire commission income and simultaneously disclosing sale of sugarcane then as per submissions of the assessee is not only undertaking purchase of sugarcane but also taking care of the entire process right from showing sugarcane seeds to procuring crops grown by its members and for entire activities supervise by Cane Commissioner of State Government who grants required approval and the supply of sugarcane is made to the sugar mills nominated by the Sugar Board. In this situation the showing of higher commission income cannot be basis of denying exemption u/s. 80P(2) of the Act. - Decided against revenue. - ITA No.1440/Del/2018 - - - Dated:- 27-1-2023 - Shri Chandra Mohan Garg, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member For the Revenue : ShriKumar Pranvav, Sr.DR For the Assessee : None ORDER PER CHANDRA MOHAN GARG, J.M. This appeal filed by the Revenue is directed against the order dated 22.11.2017 of the Ld. CIT(A), Aligarh, relating to Assessment Year 2014-15. 2. The grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific activity claim in the return of income u/s. 80P (2) of the Income Tax Act, 1961. The Ld. Senior D.R. submitted that the Ld. CIT(A) has granted relief to the assessee without any reasonable basis. Therefore impugned first appellate order may kindly be set aside by restoring that of the A.O. From the careful reading of first appellate order, we observe that the authorise representative of the assessee submitted detail written submissions before the Ld. CIT(A), which has been reproduced in the first appellate order para 4 which are being reproduced for the sake of completeness. 5. From the relevant operative part of the first appellate order, we observe that the Ld. CIT(A) granted the relief to the assessee with following observations and findings: The AO has brought to tax the whole of the surplus of Rs. 1,78,48,848/- rejecting the appellant's claim for deduction u/s 80P. This surplus has arisen from the following receipts:- (i) Gross profit - 174337.58 (ii) Anudan Keetnashak - 400000.00 (iii) Anudan krishi yantra - 440000.00 (iv) Commission Income - 20133750.00 (V) Cheq. Book Fee - 5310.00 (vi) Entry Fee - 621902.00 (vii) Intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) (a) (iii). The AO has not given any cogent reason why this exemption should not be allowed to the appellant. In my opinion, the claim of the appellant is very much in accordance with the provisions as contained w/s 80P (2) (a) (iii) and hence it deserves to be allowed. For the same reason, deduction u/s 80P (2) (a) (iii) should be allowed in respect of other incidental receipts relating to the business of marketing of agricultural produce of the members. Thus, the receipts from all the above mentioned items would be allowable for deduction. The A is being directed accordingly. (v) Cheq. Book Fee - 5310.00: The appellant is providing credit facilities to its members and for that purpose cheques book are issued. The cheque book fees is essentially incidental to the business of providing credit facilities to the members. The same would be eligible for deduction w/s80P (2) (a) (ill). The AO is being directed to allow deduction accordingly. 6. From the careful reading of assessment as well as first appellate order and submissions of the assessee before the authorities below including submissions noted by the Ld. CIT(A) (supra). First of all we observe that the Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the activity of supply of sugarcane to the sugar mill constitute a marketing activity of sugarcane which is agricultural produce grown by the appellants members and as the appellant is cooperative society duly registered under Cooperative Society Act 1912 all the essential require for claiming deduction u/s. 80P(2)(iii) are fulfilled and thus the assessee is eligible for deduction. The assessee also drawn attention first appellate authority towards order of his predecessor for a immediately preceding year A.Y. 2013-14 which was deleted by the Ld. CIT(A), Aligarh order dated 15.09.2017 in appeal no 96/2016-17/GZB/Aligarh after considering the total facts and circumstances of the case and orders of his predecessor for A.Y. 2013-14 the Ld. CIT(A) concluded that the AO has not given any cogent reason why the claim exemption should not be allowed to the appellant. In view of above we note that principle of res judicata does not apply of tax proceedings, however rule of consistency is always respected therefore the Ld. CIT(A) was right in allowing claim of assessee u/s. 80P(2)(a) (iii) of the Act. We are unable to see any ambiguity perversity for any valid reason to interfere with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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