Income Tax Appellate Tribunal – Ahmedabad
The Dy. Cit., Anand Circle,, Anand vs M/S. Kaira Dist. Co.-Op. Milk … on 3 October, 2019 आयकर अपील य अ धकरण, अहमदाबाद यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ”A” BENCH, AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2218/AHD/2016 नधारण वष/Asstt. Year: 2012-2013 D.C.I.T, M/s. Kaira District Co-op. Milk, Anand Circle, Vs. Producers Union Ltd., Anand. Amul Dairy Road, Anand-388001. PAN: AAAAK8694F (Applicant) (Respondent) Revenue by : Shri O.P. Vaishnav, CIT.D.R Assessee by : Shri Yogesh Shah A.R सुन वाई क तार ख/ Da te of Hearing : 01/10/2019
घोषणा क तार ख / Date of Pro nouncement: 03/10/2019 आदेश /O R D E R PER WASEEM AHMED ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the
Revenue against the order of Learned Commissioner of Income
Tax(Appeals)-4, Vadodara, (in short Ld.CIT(A)) dated 20/04/2016
arising in the matter of assessment order passed u/s.143(3) of the
Income-tax Act 1961, (here-in-after referred to as ”the Act”) dated
31/03/2015 relevant to Assessment Year 2012-2013. ITA no.2218/AHD/2016 Asstt. Year 2012-13 2 The Revenue has raised following grounds of appeals: 1. Whether on the facts and circumstances of the case and in law, the Ld. C.I.T.(A) was justified in holding that deleting addition of Rs. 81,37,986/-, being disallowance u/s.. 80P(2)(d) of the Act notwithstanding the fact that the interest paid by the assessee to various co-operative banks/ Societies/ Bodies exceeded the income earned from its investment with Bank/Co-operative’ Societies nor the assessee could substantiate the claim that interest bearing funds have not been invested with Co-operative Bank. 2. Whether on the facts and circumstances of the case and in law, the Ld. C.I.T.(A) was justified in deleting the addition of Rs. 381,37,986/- by relying on the decision of Hon’ble Supreme Court of India in the case of Munjal Sales Corpn vs. C.I.T., Ludhiana reported in 168 Taxman 43(SC) and decision of Hon’ble High Court of Bombay in the case of C.I.T. vs. Reliance Utilities & Power Ltd. reported in 178 Taxman 135, without appreciating the facts of the present case is distinguishable from the facts of the said cases, in as much whereas in the instant case the issue pertained to disallowance u/s. 80P(2)(d) of the Act., whereas in the said cases referred to by Hon’ble Supreme Court and Hon’ble Bombay High Court, the issue pertained to disallowance of deduction u/s. 36(ll)(iii) of the Act. 3. Whether on the facts and circumstances of the case and in law, the Ld. C.I.T. (A) erred in deleting the addition of Rs. 6,14,024/- on account of grant received under Sampoorna Gramin Swarojgar Yogna from the Govt. without appreciating the fact that the assessee started its commercial activities much before the receipt of the aforesaid grant, hence the same ought to be treated as revenue receipt. 4. Whether on the facts and circumstances of the case and in law, the Ld. C.I.T. (A) erred in deleting the addition of Rs.6,14,024/- on account of grant receiv under Sampoorna Gramin Swarojgar Yogna from the Govt. without considering the decision of Hon’ble Supreme Court in the case of Sahney Steel and Press Works Ltd. v/s. CIT 94 Taxman 368(SC) and (ii) Kesoram Industries and Cotton Mills Ltrd. V/s.CIT 191 ITR 518 (Calc) relied upon by the A.O. in the assessment order. 5. Whether on the facts and circumstances of the case and in law the Ld.C.I.T.(A) erred in directing the A.O. to allow the claim of additional depreciation and delete the addition of Rs, 1,58,29,479/- without appreciating that ” In terns of section 32(1), additional depreciation is available in year in which machinery is new and first put to use and not for any succeeding year.” 6. Whether on the facts and circumstances of the case and in law the Ld.C.I.T.(A) erred in relying on the decision of Hon’ble Supreme Court in the case of Bajaj Tempo Ltd. vs. CIT (1992) 196 ITR 188(SC) to hold that the assessee should not be denied the claim of additional depreciation without appreciating that the fact of the case of Bajaj Tempo Ltd. (supra) is distinguishable from the facts of the present case in as much in that case the issue pertained to disallowance u/s. 15 of the Act, ITA no.2218/AHD/2016 Asstt. Year 2012-13 3 whereas in the instant case the issue pertained to the disallowance of additional depreciation claimed by the assessee. 7. Whether on the facts and circumstances of the case and in law the Ld.C.I.T.(A) erred in directing deletion of addition of Rs.1,16,43,000/- by relying on the decision of Hon’ble Gujarat High Court in the case of C.I.T. vs. Mehsana District Co-op. Milk Producers Union Ltd (2005) 146 Taxman 365 (Gujarat), without appreciating that the Hon’ble Gujarat High Court in the case of Mehsana District Clo-op. Milk Producers Union Ltd held that Dept could not discharge onus which was on it to prove that expenditure could be termed as application of income with evidence, whereas in the instant case the A.O. had clearly recorded his finding in the matter in the assessment order. 8. The appellant craves leave to add, to amend or alter the above grounds as may be deemed necessary 2. The 1st issue raised by the Revenue in ground No. 1 and 2 is that
learned CIT (A) erred in deleting the addition made by the AO for
₹81,37,986/- by disallowing the deduction claimed under section 80P(2)(d) of
the Act. 3. The facts in brief are that the assessee is a co-operative society and
engaged in the activity of processing of milk and manufacturing of milk
products and cattle feed. The assessee in the year under consideration has
claimed the deduction under section 80P(2)(d) of the Act for the amount of
interest received from co-operative societies and co-operative banks
amounting to ₹ 81,37,986/- only. However, the AO found that there is interest
expenses claimed by the assessee amounting to ₹14,41,25,295/- in the profit
and loss account. Accordingly, the AO was of the view that there is net
interest income(loss) of ₹ (13,59,87,309/-) (14,41,2,295 – 81,37,986) only.
Accordingly he opined that there cannot be any deduction under section
80P(2)(d) of the Act as claimed by the assessee. Thus he disallowed the
deduction of ₹ 81,37,986/- claimed under section80P(2)(d) of the Act and
added to the total income of the assessee. ITA no.2218/AHD/2016 Asstt. Year 2012-13 4 4. Aggrieved assessee preferred an appeal to the learned CIT (A) who has
deleted the addition made by the AO by observing as under: 4.3. I have considered the submissions of the learned Authorized representative and the order of the Assessing Officer. I am in agreement with the Authorized Representative that substantial interest free funds were available with the appellant during the year under consideration as well as in past years. The addition made by the Assessing Officer is not based on proper appreciation of facts. Judicial decisions as cited by the Ld. Authorized Representative including that of jurisdictional tribunal in the case of Sabarkantha Dist Co-op. Milk Producers’ Union Ltd. (ITA 2613/Ahd/2012),where disallowance u/s 80P(2)(d) was deleted and no interest was deducted from the interest received as there were sufficient interest free funds, support the case of the appellant. Similar issue came up for consideration in the case of appellant in A.Y.2008-09 and A.Y.2011-12 and the same was allowed \n favour of the appellant vide order dated 14.08.2015 in Appeal No.CAB/4-305/2014-15 and Appeal No.CAB/4-304/2014-15 respectively. Facts of the present case are identical and I have no reason to differ from these orders. Moreover, the case is covered by the decision of the jurisdictional Tribunal in the case of Sabarkantha Dist Co-op. Milk Producers’ Union Ltd. (Supra). Respectfully following these cases, this ground of appeal is allowed.
Being aggrieved by the order of the learned CIT (A), the revenue is in
appeal before us.
5. Both the learned DR and the AR before us relied on the order of the
authorities below as favourable to them.
6. We have heard the rival contentions of both the parties and perused the
materials available on record. At the outset we note that the impugned issue is
covered in favour of the assessee in its own case by the order of this tribunal
bearing ITA No. 3557/AHD/2015 and ITA No. 3613/AHD/2015 pertaining to
the assessment year 2008-09 vide order dated 23-03-2018 wherein it was held
as under:
8. Regarding the claim of deduction u/s. 80P(2)(d) of the act of Rs. 3640842/- the Ld. Counsel has submitted that the Hon’ble ITAT in assessee’s own case for A.Y.
ITA no.2218/AHD/2016 Asstt. Year 2012-13
5 1986-87 while rejecting the appeal of department for denying the deduction of interest u/s 80P(2)(d) held that assessee cannot borrow the money for temporary investment. He has also submitted that even Gujarat High Court in assessee’s own case while dealing with issue of re-opening u/s. 148 for disallowing the deduction of interest observed that AO is conscious about the claim made by the assessee and the position of interest earned on investment, vis-a-vis interest or commission paid by it, and has been treating the investment income having no relation to the interest paid in as much as it was consistent finding that no interest has been paid on borrowings for earning interest on investment. The same has been reported in 87 Taxman 144. In view of the above, in earlier years i.e. from A.Y. 1986-87 it is consistently accepted by the AO, CIT(A), ITAT and High Court in assessee’s own case that assessee has never borrowed the money for making the investment as always assessee has interest free funds more than investment. In A.Y. 91-92, section 80AB has also been considered while allowing the deduction u/s. 8jOP(2)(d) of the Act. In view of these facts and findingsTwe”are inclined with the findings of the Ld.cit(A). Accordingly, both the grounds of appeal of the revenue on this issue stands dismissed.
6.1 Respectfully following the order of this tribunal in the own case of the
assessee, we do not find any reason to interfere in the order of the learned CIT
(A). Hence, the ground of appeal of the Revenue is dismissed.
7. The issue raised in ground No. 3 and 4 is that the learned CIT (A) erred
in deleting the addition made by the AO for ₹6,14,024/- representing the
amount of grant received under Sampoorna Gramin Swarojgar Yojna ( for
short SGSY) from the Government.
8. The assessee in the year under consideration has shown the addition of
₹ 6,14,024/- under the head grants SGSY on the liability side which
represents the amount of interest of ₹4,15,732/- and refund of ₹1,98,292/-
only. Out of such amount, a sum of ₹ 3,52,500/- was utilized in the year under ITA no.2218/AHD/2016 Asstt. Year 2012-13
6 consideration and the balance amount was carried forward to the next year.
Accordingly the assessee claimed that it has not received any grant from the
SGSY in the year under consideration.
8.1 The assessee further submitted that its role is of the facilitator for the
implementation of the project of SGSY and on the completion of the project it
will receive 2% of the project cost as its income. As the project has not
completed, therefore there is no question of treating the same as income on
account of such SGSY project.
9. However, the AO disagreed with the contention of the assessee and
held that the impugned amount represents the revenue receipts. Therefore the
same should be treated as income of the assessee.
10. Aggrieved assessee preferred an appeal to the learned CIT (A) who has
deleted the addition made by the AO by observing as under:
9.3. I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. This issue came up for consideration in appellant’s case in A.Y. 20011-12 and the same was allowed by my predecessor in favour of the appellant vide order dated 14.08.2015 in Appeal No.CAB/4- 304/2014-15 as under:-
“4.3 I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. I agree with Ld. Authorized Representative that this ground of appeal is decided in favour of the appellant by Ld.CIT(A)-IV in Appeal No. CAB/IV-A-274/2011-12 in appellant’s own case in A.Y. 2006-07 vide his order dated 03.09.2013. Since the facts of the case are identical, I find no reason to differ from my predecessor and allow this ground. The Assessing Officer is directed to delete the addition of Rs.1,82,64,951/-.” Facts of the present case are identical and I have no reason to differ from earlier order. In view of the past history of the case, the Assessing Officer is j directed to delete the addition of Rs.6,14,024/-.
ITA no.2218/AHD/2016 Asstt. Year 2012-13
7 Being aggrieved by the order of the learned CIT (A), the Revenue is in
appeal before us.
11. Both the learned DR and the AR before us relied on the order of the
authorities below as favourable to them.
12. We have heard the rival contentions of both the parties and perused the
materials available on record. At the outset, we note that the impugned issue
is covered in favour of the assessee in its own case by the order of this
tribunal bearing ITA No. 2953/AHD/2013 pertaining to the assessment years
2006-07 vide order dated 19-09-2016. The copy of the same is available on
record. Respectfully following the order of this tribunal in the own case of the
assessee, we do not find any reason to interfere in the order of the learned CIT
(A). Hence, the ground of appeal of the revenue is dismissed.
13. The issue raised in ground No. 5 and 6 is that the learned CIT (A) erred
in deleting the addition made by the AO for ₹ 1,58,29,479/- on account of
additional depreciation.
14. The assessee in the immediate preceding assessment year claimed
additional depreciation of ₹1,58,29,479/- being 10% instead of 20% on the
reasoning that the corresponding assets was purchased and put to use for less
than 180 days. Accordingly, the assessee claimed the balance amount of
additional depreciation in the year under consideration. However the AO was
not satisfied with the claim of the assessee by observing that there is no
provision to claim additional depreciation in the subsequent assessment if the
asset purchased was used for less than 180 days in the year of acquisition.
ITA no.2218/AHD/2016 Asstt. Year 2012-13
8 Accordingly, the AO disallowed the same and added to the total income of the
assessee.
15. Aggrieved assessee preferred an appeal to the learned CIT (A) who
deleted the disallowance made by the AO by observing as under:
10.3. I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. The Assessing Officer has heavily relied upon the decision of ITAT, Chennai in the case of Brakes India Ltd. Vs Deputy Commissioner of Income-tax (LTU) [2013] 33 taxmann.com 501 (Chennai – Trib.). However, the perusal of this decision reveals that the reliance of the Assessing Officer on this decision is misplaced as the same is in favour of the assessee on the issue of unclaimed Addl. Depreciation in next year. There is no dispute that the appellant purchased new machinery or plant during the year and it was already engaged in the business of manufacture and production of ice cream, paneer, ghee etc. Therefore, it is the contention of the Ld. Authorized Representative that the assessee is eligible for the additional depreciation as per the provisions of section 32(l)(iia) of the Act. It is further submitted that the assessee has claimed additional depreciation in respect of assets which are put to use for less than 182 days in A.Y. 2011-12 and claimed only 10% additional depreciation in that year and remaining 10% have been claimed in the year under consideration. These facts are not in dispute. The appellant has claimed the remaining 10% depreciation on the basis of decision of Delhi ITAT in the case of Cosmo Films Ltd. [2012] 24 taxmann.com 189(Delhi-Trib). Recently Cochin ITAT in the case of Apollo Tyres Ltd. Vs ACIT [2014] 45 taxmann.com 337(Cochin- Trib) has also allowed the remaining 10% additional deprecation of preceding year in the next year. It has been held by the Tribunal as under :-

These decisions cited supra, have direct bearing on the issue at hand and several judicial authorities have decided the issue in favour of the assessee. I also agree with the Ld. Authorized Representative that where two views are possible, the interpretation of statutory provision favourable to the appellant should be adopted. This view finds support from the Apex Court decisions in the case of Vegetable Products Ltd. 88ITR 192 (SC) and Kerela HC decision in the case of CITVsAJ. Abraham Anthraper [2004] 268 ITR 417 (Ker.).

It would not be out of place to consider at this stage, the objects for inserting Section 32(l)(iia) of the Act and which reads as under:-

INCENTIVES FOR INVESTMENT AND INDUSTRIAL GROWTH :
Additional depreciation on new machinery and plant Under the existing provisions contained in sub-section (1) of section 32 of the Income-tax Act, deduction is allowed in respect of depreciation on assets owned wholly or partly by the assessee and used for the purposes of the business or profession at the rates prescribed under the Income-tax Rules, 1962.
ITA no.2218/AHD/2016 Asstt. Year 2012-13
9 With a view to give a boost to the manufacturing sector, it is proposed to
allow a deduction of a further sum equal to fifteen per cent of the actual cost of
such machinery or plant acquired and installed after 31st day of March, 2002–

(i) in the case of a new industrial undertaking in the previous year in which it begins to manufacture or produce any article or thing; or (ii) in the case of an existing industrial undertaking in the previous year in which it achieves substantial expansion by way of increase in the installed capacity by not less than twenty five per cent. Such further sum shall be deductible from the written down value of the asset. “Installed capacity” has been defined to mean the capacity of production as existing on the last day of any previous year commencing on or after the 31st March, 2002. The proposed amendment will take effect from 1st April, 2003 and will, accordingly, apply in relation to the assessment year 2003- 2004 and subsequent years.
A perusal of the aforementioned object clearly shows that the legislature wanted to
give a boost to the manufacturing sector. This provision was subsequently amended
by the Finance Bill, 2005 and the object for amending the provisions read as
under:-

“Clause 8 seeks to amend section 32 of the Income-tax Act relating to depreciation.
Under the existing provisions contained in clause (iia) of sub-section(l) of the said
section, a further sum equal to fifteen per cent. Of the actual cost of any new
machinery or plant (other than ships and aircraft) acquired and installed after the
31st Day of March, 2002 by an assessee engaged in the business of manufacture or
production of any article or thing, is allowed as deduction as further depreciation.
It is proposed to increase the said sum of further depreciation mentioned in the said
clause (iia) from fifteen per cent to twenty percent. It is further proposed to omit the
conditions relating to industrial undertaking being new or substantial expansion
mentioned in the first proviso to the aforesaid clause (iia) and also to omit the
requirements of furnishing details of machinery or plant and report of an
accountant mentioned in the third proviso of that clause (iia).
This amendment will take effect from 1st April, 2006 and will, accordingly, apply in
relation to assessment year 2006-07 and subsequent years. Thus, it can be seen that
not only the rate of additional depreciation was increased from 15% to 20% but
also the rigidity of conditions pertaining to the increase in the installed capacity
and for furnishing details of machinery and plant and report of an Accountant were
done away with. Meaning thereby, that these conditions were not necessary for the
claim of additional depreciation. Once again, it can be seen that the amendments
brought to this section is to encourage new investment in plant and machinery.

The observations of the Hon’ble Supreme Court in the case of Bajaj Tempo
Ltd. Vs CIT 11992] 196 1TR 188 (SC) deserves Special mention here and which
read as under.-

“6. The section, read as a whole, was a provision directed towards encouraging
industrialization by permitting an assessee setting up a new undertaking to claim ITA no.2218/AHD/2016 Asstt. Year 2012-13
10 the benefit of not paying tax to the extent of such per cent in a year on the capital employed. But the legislature took care to restrict such benefit only to those undertakings which were new in form and substance by providing that the undertaking should not be “formed” in any manner provided in cl. (I) of sub-s. 15C. Each of these requirements namely, formation of the undertaking by splitting up or reconstruction of an existing business or transfer to the undertaking of building, raw material or plant used in any previous business results in denial of the benefit contemplated under sub-s. (1). Since a provision intended for promoting economic growth has to be interpreted liberally, the restriction on it, too, has to be construed so as to advance the objective of the section and notto frustrate it.”

Considering the facts of the case in the light of the observations of Delhi Tribunal in case of Cosmo Films Ltd. (Supra) and Cochin Tribunal in the case of Apollo Tyres Ltd.(Supra), and in the light of the ratio laid down by the Hon’ble Supreme Court (supra), in my considered opinion, the assessee should not be denied the claim of additional depreciation. Accordingly I direct the A.O to allow the claim of additional depreciation and delete the addition of Rs.1,58,29,479/-This ground is allowed in favour of the appellant.
Being aggrieved by the order of the learned CIT (A), the revenue is in
appeal before us.
16. Both the learned DR and the AR before us relied on the order of the
authorities below as favourable to them.
17. We have heard the rival contentions of both the parties and perused the
materials available on record. At the outset we note that the impugned issue is
covered in favour of the assessee by the order of this tribunal in the case of
Aswani Industries Ltd. in ITA No. 140/AHD/2013 pertaining to the
assessment 2008-09 wide order dated 31-05-2013 wherein it was held as
under:
The Ld. CIT(A) has given relief to the assessee by following the decision of ITAT, Delhi in the case of DCIT vs. Cosmo Films Ltd (124 Taxman.com 189) wherein it has been held that the additional depreciation cannot be restricted to 50 % and it has to be allowed in succeeding years if it is not allowed full in the relevant year. For the sake of convenience the relevant portion of the order is as under :-
ITA no.2218/AHD/2016 Asstt. Year 2012-13
11 “17. We have heard both the sides on this issue. Section 32(l)(iia) inserted by
Finance (No. 2) with effect from 1.4.2003. In speech of Finance Minister this
clause was inserted to provide incentive for fresh investment in industrial sector.
This clause was intended to give impetus to new investment in setting up a new
industrial unit or for expanding the installed capacity of existing units by at least
25 % thereafter these provisions were amended by the Finance (No.2) Act of 2004
w.e.f. 1.4.2005 and provided that in the case of any machinery or plant which has
been acquired after the 31st day of march, 2005 by an assessee engaged in the
business of manufacture of production of any article or thing a further sum equal
15 % of actual cost of such machinery or plant shall be allowed as deduction under
clause (ii) of section 33(1). This additional allowance u/s 32(1) (iia) is made
available as certain percentage of actual cost of new machinery and plant acquired
and installed. This provision has been directed to the setting up new industrial
undertaking making or for expansion of the industrial undertaking by way of
making more investment in capital goods. Thus, these are incentives aimed to boost
new investments in setting up and expanding the units. The proviso to section
32(l)(iia) restricts the benefits in respect of following- ‘Provided that no deduction
shall be allowed in respect of_
(A) Any machinery or plant which, before its installation by the assesses was used
either within or outside India by any other person; or
(B) Any machinery or plant installed in any office premises or any residential
accommodation, including accommodation in the nature of a guest-house or
(C) Any office appliances or road transport vehicle, or(D) Any machinery or plant,
the whole of the actual cost of which is allowed as a deduction (whether by way of
depreciation or otherwise) in computing the income chargeable under the head “profits and gains of business or profession of any previous year.”
Thus, this incentive in the form of additional sum of depreciation is not available to
any plant or machinery which been used either within India or outside India by any
other person or such machinery and plant are installed in any office premises or
any residential accommodation, including accommodation in the nature of a guest
house or any office appliances or road transport vehicles, or any machinery or
plant the whole of actual cost of which is allowable as deduction (where by way of
depreciation or otherwise) in computing the total income under the head “Profit
and gains of business or profession” of any one prevision year. Thus, the intension
was not to deny the benefit to the assets who have acquired or instated new
machinery or plant. The second proviso to section 32(1 )(ii) restricts the
allowances only to 50% where the assets have been acquired and part to use for a
period less than 160 days in the year of acquisition. This restriction is only on the
basis of period of use. There is no restriction, that balance of one time incentive in
the form of additional sum of depreciation shall not be available in the subsequent
year. Section 32(2) provides for a carry forward set up of unabsorbed depreciation.
This additional benefit in the form of additional allowance u/s 32(l)(iia) is one time
benefit to encourage the industrialization and in view of the decision of Hon’ble
Supreme Court in the case of Bajaj Tempo vs. CIT, cited supra, the provisions
related to it have to be constructed reasonably, liberally and purposive to make the
provision meaningful while granting the additional allowance. This additional
benefit is to give impetus to industrialization and the basic intention and purpose of
these provisions can be reasonably and liberally held that the assessee deserves to ITA no.2218/AHD/2016 Asstt. Year 2012-13
12 get the benefit in full when there is no restriction in the statute lo deny the benefit of balance of 50% when the new plant and machinery were acquired and use for less than 180 days. One time benefit extended to assessee has been earned in the year of acquisition of new plant and machinery. It has been calculated @ 15% but restricted to 50% only on account of usage of these plant & machinery in the year of acquisition. In section 32(1 (iia) the expression used is “shall be allowed”. Thus the assessee had earned the benefit as soon as he had purchased the new plant and machinery in full but it is restricted to 50% in that particular year on account of period of usages. Such restrictions cannot divest the statutory right. Law does not prohibit that balance 50% will not be allowed in succeeding year. The extra depreciation allowable u/s 32(l)(iia) in an extra incentive which has been earned and calculated in the year of acquisition but restricted for that year to 50% on account of usage. The so earned incentive must be made available in the subsequent year. The overall deduction of depreciation u/s 32 shall definitely not exceed the total cost of plant machinery. In view of this matter, we set aside the orders of the authorities below and direct to extend the benefit.”

In view of the above, we feel no need to interfere with the order passed by Ld. CIT(A) in respect of deletion of disallowance on account of additional depreciation of Rs. 4,98,8597- also and the order passed by Ld. CIT(A) is hereby upheld.
17.1 We also note that the Hon’ble Madras High Court in the case of CIT vs.
T.P Textiles Pvt. Ltd. reported in 79 Taxmann.com 411 has decided the issue
in favor of the assessee. In view of the above, we hold that the assessee is
entitled for the depreciation claimed by it in the year under consideration on
the assets which was purchased and put to use for less than 180 days in the
immediate preceding assessment year. We do not find any reason to interfere
in the finding of the learned CIT (A). Hence the ground of appeal of the
Revenue is dismissed.
18. The last issue raised by the assessee is that the learned CIT (A) erred in
deleting the addition made by the AO for ₹1,16,43,00,000/- on account of the
expenditure incurred in connection with the purchase of milk.
19. The assessee during the assessment proceedings claimed that the
amount of expenditure of ₹ 1,16,43,00,000/- is representing the difference ITA no.2218/AHD/2016 Asstt. Year 2012-13
13 between the provisional price and the actual price determined at the end of the
particular period for the purchase of milk. The assessee further submitted that
it is purchasing milk from its members being primary co-operative societies at
the provisional price. The assessee also submitted that the milk purchased by
it is supplied to GCMMF being a marketing body which sales the same in the
market. Accordingly, the difference in the purchase price and sale price are
subsequently given to the members. Thus the assessee claimed that such
payment should be treated as expenditure and accordingly it should be
allowed as deduction.
20. However the AO was of the view that the amount distributed among
the primary co-operative societies being the members of the assessee is
nothing but the application of income. Accordingly the AO disallowed the
same and added to the total income of the assessee.
Aggrieved assessee preferred an appeal to the learned CIT (A) who has
deleted the addition made by the AO by observing as under:
11.3. I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. I am in agreement with the Ld. Authorized Representative that the issue is covered by the decision of Jurisdictional Tribunal in appellant’s own case for A.Y. 1994-95 {ITA No. 3286/Ahd/1997) and A.Y. 1996- 97 (ITA No. 1133/Ahd/2000). The relevant para of the decision of the ITAT is quoted by Ld. Authorized Representative and the same is mentioned in para 11.2 above. The Jurisdictional High Court in case of Mehsana District Co-op. Milk Producers’ Union Ltd. [2005] 146 Taxman 355 (Gujarat) on identical facts has also held that price difference paid to the member societies was held to be allowed as business Expenditure. Respectfully following the decisions cited supra, this Ground of appeal is allowed in favour of the appellant and addition of Rs.1,16,43,00,000/- is directed to be deleted. Being aggrieved by the order of the learned CIT (A), the Revenue is in
appeal before us.
ITA no.2218/AHD/2016 Asstt. Year 2012-13
14 21. Both the learned DR and the AR before us relied on the order of the
authorities below as favourable to them.
22. We have heard the rival contentions of both the parties and perused the
materials available on record. At the outset we note that the impugned issue is
covered in favour of the assessee in its own case by the order of this tribunal
bearing ITA No. 3286/AHD/1997 for the AY 1994-95 and pertaining to the
assessment years 1996-97 in ITA No. 1133/AHD/2000 vide order dated 06-
10-2005. The copy of the order is placed on record.
23. Respectfully following the order of this tribunal in the own case of the
assessee, we do not find any reason to interfere in the order of the learned CIT
(A). Hence, the ground of appeal of the revenue is dismissed.
24. In the result, the appeal of the revenue is dismissed.
Order pronounced in the Court on 03/10/2019 at Ahmedabad.
-Sd- -Sd- (KUL BHARAT) (WASEEM AHMED)
JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy)
Ahmedabad; Dated 03/10/2019
manish

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