MEHSANA DIST CO.OP MILK PRODUCERS UNION vs. COMMISSIONER OF INCOME-TAX

ITR/31/1990HC GujaratGJHC24013218199004 October 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the contribution made under Section 69 of the Gujarat Rajya Sahakari Cooperative Societies Act was an allowable deduction. This decision was based on the High Court's prior ruling in CIT vs. Kaira District Co-operative Milk Producers' Union Ltd. (247 ITR 314). Therefore, the answer to the first question was in the affirmative, favoring the assessee. Regarding the other questions concerning Section 35-C, the Court referred to its decision in Income Tax Reference No. 32 of 1987. In that decision, it was held that deduction under Section 35-C is available for the entire expenditure incurred by the assessee, and the Tribunal erred in restricting it to 10%. Consequently, questions 2, 3, and 4, as well as the question referred by the revenue, were answered in the negative, meaning the entire expenditure was eligible for weighted deduction, favoring the assessee and against the revenue. The reference was disposed of accordingly.

What were the facts?

This case involves an Income Tax Reference before the High Court of Gujarat at Ahmedabad, initiated by the assessee, Mehsana Dist Co.Op Milk Producers Union, against the Commissioner of Income-Tax. The reference pertains to assessment years not explicitly stated but relates to the interpretation and application of certain sections of the Income Tax Act, 1961. The core dispute revolves around the deductibility of contributions made under Section 69 of the Gujarat Rajya Sahakari Cooperative Societies Act and the eligibility for weighted deduction under Section 35-C of the Income Tax Act. The Income Tax Appellate Tribunal's decision formed the basis of the questions referred to the High Court. The procedural history involves the Tribunal referring specific questions of law at the instance of both the assessee and the revenue.

What were the issues?

The Tribunal had to decide the following questions: 1. Whether the contribution made as a statutory liability under Section 69 of the Gujarat Rajya Sahakari Cooperative Societies Act was allowable as a deduction under Sections 28/37 of the Income Tax Act? 2. Whether the Tribunal's interpretation and application of Section 35-C of the Income Tax Act, 1961, were correct? 3. Whether the entire expenditure of Rs. 65,56,555/- was eligible for weighted deduction under Section 35-C of the Income Tax Act? 4. Whether only 10% of the expenses incurred on dissemination of information or demonstration of modern techniques and methods of agricultural, animal husbandry, dairy, or poultry farming, or advice on such techniques or methods, is eligible for deduction under Section 35-C of the Income Tax Act? Assessee's Contentions: The assessee argued that the contribution under Section 69 was an allowable deduction and that the entire expenditure incurred under Section 35-C was eligible for weighted deduction. Revenue's Contentions: The revenue's primary contention, as reflected in their referred question, was whether the Tribunal was right in allowing 10% of the expenditure for weighted deduction under Section 35-C. This implies the revenue likely argued for a lesser deduction or no deduction for certain expenses under Section 35-C.

Which sections of the Income-tax Act were involved?

Section 69,Section 28,Section 37,Section 35-C

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 31 of 1990

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 69

All 9,011 judgments and leading authorities on Section 69 →

Recent GST High Court judgments

Search GST case law →