THE DCIT.CIRCLE-1(2),, AHMEDABAD vs. GUJARAT STATE CO.OP. MARKETING FEDERATION LTD., AHMEDABAD

The fact in brief is that assessee has filed return of income declaring income at Rs. nil on 15th October, 2010. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 30th August, 2011. During the course of assessment, the assessing officer has disallowed the claim of deduction u/s. 80P(2)(d) of the act in respect of interest income for Rs. 1,42,50,851 earned by the assessee on the fixed deposit maintained with SBI. The assessing officer has also disallowed the claim of deduction u/s. 80P(2) (c) of the act in respect of amount of Rs. 27,74,656/- as godown rent received stating that goods stored were not in the nature of commodities therefore the rent received was not eligible for deduction u/s. 80P(2)(c) of the act. The assessment u/s. 143(3) of the act was finalized on 15th March, 2013 by disallowing the aforesaid claim of deduction and the assessing officer has also initiated penalty proceedings u/s. 271(1)(c) of the act. During the course of penalty proceedings, the assessee explained there was neither filing of inaccurate particulars of income nor concealment of income as the additions were made on the basis of details submitted during the course of assessment proceedings. The assessee has explained that complete information along with supporting evidences were furnished in respect of claim of deduction on the aforesaid income, however, its claim of deduction u/s. 80P was not accepted by the assessing officer. In view of the above facts, the assessee stated that it cannot be held guilty of furnishing of inaccurate particulars. The assessing officer has not accepted the explanation of the assessee. The assessing officer was of the view that claiming deduction which were not allowable as per provision of the act definitely falls under furnishing inaccurate particulars of income, therefore, he has levied penalty to the amount of Rs. 52,60,882/- u/s. 271(1)(c) of the act.

Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has deleted the penalty levied after placing reliance on the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd. 189 taxman 322 (SC) and the decision of Hon’ble Supreme court in the case of JCIT Vs. Classic Industries Pvt. Ltd. (2017) 80 taxman.com 220 (SC).

During the course of appellate proceedings before us, the ld. departmental representative has supported the order of assessing officer. On the other hand, the ld. counsel has furnished paper book containing details and information furnished before the assessing officer and ld. CIT(A) during the course assessment proceedings and appellate proceedings. The ld. counsel has supported the decision of ld. CIT(A).

We have heard both the sides and perused the material on record carefully. The assessee is a registered co-operative society and is engaged in distribution of agricultural inputs, output, oilseeds, foodgrains etc. During the year under consideration, the assessee has filed return of income declaring total income at Rs. nil after claiming deduction u/s. 80P of the act to the extent of total income i.e. Rs. 35567458/- for the year under consideration. The assessing officer has made disallowance i.e. disallowance of deduction claimed u/s., 80P(2)(d) Rs. 1,42,50,851/- and disallowance of deduction claimed u/s. 80P(2)(c) Rs. 27,74,656/- vide order u/s. 143(3) of the act passed on 15th March, 2013. After the aforesaid disallowance, the assessing officer has assessed the total income at Rs. nil and raised demand at Rs. nil vide order u/s. 143(3) dated 15th March, 2013. With the assistance

In the result, the appeal of the revenue is dismissed.