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

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ITR/26/1987HC GujaratGJHC24011759198715 April 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE KUNDAN SINGH3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, following its earlier decision in the assessee's own case for assessment year 1978-79 and a Supreme Court decision in Cambay Electric Supply Industrial Co. Ltd. vs. C.I.T. (113 ITR, 84), left the referred question unanswered. The Court directed the Tribunal to decide the question on merits after considering the relevant facts and applying the ratio laid down by the Supreme Court. The Court noted that in the previous year (1978-79), it had left a similar question unanswered with a direction to the Tribunal to decide it on merits. The reference is disposed of accordingly with no order as to costs.

What were the facts?

The assessee, Surat Dist. Co.op. Milk Producers Union Ltd., is a co-operative society. For the assessment year 1980-81, it received interest of Rs. 1,39,069/- from other co-operative societies and paid Rs. 6,72,135/- as interest to other co-operative societies. The Income Tax Officer rejected the assessee's claim for exemption under Section 80P(2)(d) of the Income Tax Act, 1961, on the interest received. The Commissioner of Income Tax (Appeals) directed the ITO to allow the deduction. The Income Tax Appellate Tribunal dismissed the Revenue's appeal, relying on its own prior decision. The Revenue has referred a question of law to the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was eligible to relief under section 80P(2)(d) of the Act on interest of Rs. 1,39,069/- received by the assessee from the co-operative societies without taking into account that a sum of Rs. 6,72,155/- was paid by the assessee as interest to other co-operative societies? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the Tribunal's decision, which was upheld by the High Court in the earlier year, suggests the assessee claimed eligibility for relief under Section 80P(2)(d). Revenue's Contention: The Revenue contended that the eligibility for relief under Section 80P(2)(d) on interest received should be considered in light of the interest paid by the assessee to other co-operative societies. The judgment does not explicitly state the Revenue's arguments beyond this implicit contention through the referred question.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 80P(2)(d)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 26 of 1987

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question 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?

-------------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus SURAT DIST. CO.OP.MILK PRODUCERS UNION LTD. -------------------------------------------------------------- Appearance: MR RP BHATT for Petitioner Mr.B.D.Karia and Mr.R.K.Patel for the Respondent

--------------------------------------------------------------

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH Date of decision: 15/04/98

ORAL JUDGEMENT

(Per R.K.Abichandani,J)

The Income-tax Appellate Tribunal has referred the following question for the opinion of this Court under section 256(1) of the Income-tax Act, 1961. " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was eligible to relief under section 80P(2)(d) of the Act on interest of Rs. 1,39,069/- received by the assessee from the co-operative societies without taking into account that a sum of Rs. 6,72,155/- was paid by the assessee as interest to other co-operative societies ?"

2.

The matter relates to the assessment year 1980-81. The assessee is a co-operative society which had received interest amount of Rs. 1,39,069/- from other co-operative societies and had paid a sum of Rs. 6,72,135/- as interest to other co-operative societies. The I.T.O. rejected the claim of the assessee for exemption under section 80P(2)(d) of the Act in respect of the interest received by it from other co-operative societies. On appeal, C.I.T.(Appeals) directed the I.T.O. to allow deduction under section 80P(2)(d) of the Act. The Tribunal following its decision in assessee's own case, for the assessment year 1978-79, dismissed the Revenue's appeal.

3.

From the decision of the Tribunal in assessee's own case for the assessment year 1978-79, and dealing with an identical question, this Court following its decision in C.I.T. vs. Surat District Co-operative Hon'ble Supreme Court in Cambay Electric Supply Industrial Co. Ltd. reported in 113 ITR, 84 and earlier decision of this Court in assessee's own case. The Reference stands disposed of accordingly with no order as to costs.

... ***darji

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