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Facts
The assessee, a Co-operative Marketing Society, claimed a deduction of Rs.2,96,93,788/- under Section 80P(2)(a)(iii) for marketing agricultural produce grown by its members. The AO disallowed the claim for lack of evidence. An additional claim of Rs.1,00,000/- under Section 80P(2)(c)(ii) was also denied for non-submission of reply to a show cause notice.
Held
The Tribunal found that the assessee claimed the deduction under Section 80P(2)(a)(i) and 80P(2)(c)(ii) as an inadvertent mistake and that the income from running Fair Price Shops was attributable to the society's activities. The matter was remanded to the AO for fresh consideration.
Key Issues
Whether the income earned by a Co-operative Marketing Society from running Fair Price Shops is eligible for deduction under Section 80P, and whether the specific sub-sections invoked are appropriate given the nature of the income.
Sections Cited
80P(2)(a)(iii), 80P(2)(c)(ii), 80P(2)(a)(i)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI JAGADISH
(िनधा�रणवष� / Assessment Year: 2022-2023) The Coimbatore Agricultural Vs. The Deputy Commissioner of Producers Co-operative Society Ltd, Income Tax, Siruvani Road, Telungupalayam, Non Corporate Circle 2, Coimbatore 641 039. Coimbatore [PAN: AAAAT 6922H] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri S. Bhupendran, Adv (Virtual) ��यथ� क� ओर से /Respondent by : Shri. P. Vijaideepan, IRS, JCIT. सुनवाई क� तार�ख/Date of Hearing : 13.02.2025 घोषणा क� तार�ख /Date of Pronouncement : 14.03.2025 आदेश / O R D E R MANU KUMAR GIRI (Judicial Member)
The captioned appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) NFAC Delhi [CIT(A)] dated 11.09.2024 for Assessment Year 2022-2023.
Brief facts are as under: The facts of the case are that the assessee is a Co-operative Marketing Society. In assessment, AO disallowed an amount of Rs.2,96,93,788/- claimed by 80P(2)(a)(iii). The AO observed that as per the provisions of that section, deduction is allowable on the marketing of agricultural produce grown by members of the Society. As per show cause notice issued by the AO in this regard, the assessee was required to furnish documentary evidence that the assessee society is marketing the agricultural produce grown by its members. However, no documentary evidence was furnished to prove that the society is marketing the agricultural produce grown by its members only. Further, no material has been submitted to show how deduction u/s 80P is available to the appellant in respect of the claim now made that assessee is running Fair Price Shop and Rice and Wheat Margin money be treated as exempt u/s 80P. Further, the assessee claimed deduction of Rs.1,00,000/- u/s 80P(2)(c)(il) of the Act. During assessment, the AO denied the deduction since no reply had been submitted with respect to the show cause notice issued by the AO to substantiate the said claim. The assessee challenged the order of the AO before the ld. CIT(A) who confirmed the order of AO.Aggrieved assessee is in appeal before us.
The ld. counsel for the assessee submitted that in appeal before the ld. CIT(A), the assessee has stated that the claim made under the said sub-section is an inadvertent mistake and the appellant, in respect of such income, which is shown in the Trading and P&L account under Trade income, claims the same as Rice and Wheat Margin money. The appellant has submitted that as the activity of running Fair Price Shop is not on its own but as per the mandate of the state Government, any income arising therefrom falls within the scope and ambit of "attributable to" as envisaged in section 80P.