Gandhinagar District Co-op.Milk Producers Union Ltd. vs. ACIT

Parties Involved

Facts Summary

The assessee, a co-operative society registered under the Gujarat Co-operative Societies Act, 1961, engaged in the collection of raw milk from primary milk cooperative societies, filed its return of income for the assessment year 2020-21 declaring a total income of Rs.3,12,33,210/- after claiming deductions under Section 80P of the Income Tax Act, 1961 amounting to Rs.1,44,48,096/-. The Assessing Officer (AO) disallowed deductions claimed under Section 80P(2)(d) and treated government grants of Rs.50,00,000/- received during the year as revenue receipts. The case was selected for scrutiny under CASS. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (CIT(A)) against the order of the AO. The CIT(A) confirmed the AO’s disallowance of the deduction claimed under Section 80P(2)(d) of the Act, amounting to Rs.1,44,48,096/-. The CIT(A) also upheld the AO’s addition of Rs.50,00,000/- as revenue income. Aggrieved by the order of CIT(A), the assessee is in appeal before the Income Tax Appellate Tribunal, Ahmedabad.…

Legal Issues

• 1. Disallowance of deduction u/s. 80P(2)(d) of the Act amounting to Rs.1,04,22,996/- in respect of interest and dividend earned from the Ahmedabad Dist. Co. Op. Bank Limited.
• 2. Disallowance of deduction u/s. 80P(2)(d) of the Act amounting to Rs. 40,25,100/- in respect of dividend earned from the Gujarat Co. Op. Milk Marketing Federation Ltd (GCMMF Ltd.).
• 3. Disallowance of deduction of Rs. 50,000/- u/s. 80P(2)(c) of the Act.
• 4. Treatment of the government grant of Rs. 50,00,000/- received by the appellant as a revenue receipt.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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