INCOME TAX OFFICER v. SHERAWALI MAJUR KAMGHAR SAHAKARI SANSTHA LTD
[Citation -2006-LL-0516]

Citation 2006-LL-0516
Appellant Name INCOME TAX OFFICER
Respondent Name SHERAWALI MAJUR KAMGHAR SAHAKARI SANSTHA LTD.
Court ITAT
Relevant Act Income-tax
Date of Order 16/05/2006
Assessment Year 1995-96, 1997-98
Judgment View Judgment
Keyword Tags co-operative society • labour co-operative • tax audit report • succeeding year • nil income
Bot Summary: In both the years, the Revenue has raised various grounds but the only grievance of the Revenue in both the years is that the assessee is not entitled to deduction under s. 80P(2)(a)(vi). Briefly stated, the facts are that the assessee is a labour co-operative society which is registered under Maharashtra Co-operative Societies Act. The assessee has also filed copies of trial balance, PL a/c and audit report as required under the Maharashtra Co-op. The AO rejected the claim of the assessee for deduction under s. 80P(2)(a)(vi) in both years, as the assessee could not produce books of account in both years. On appeal, it was held by learned CIT(A) that the assessee is entitled to deduction under s. 80P(2)(a)(vi) by holding that since the AO has allowed deduction under s. 80P(2)(a)(vi) in the preceding and succeeding year, there is no reason to deny deduction in these two years particularly when the members o f the society were same in these two years and preceding and succeeding years. In the present case also, the only reason given by the AO to deny deduction under s. 80P(2)(a)(vi) is non-maintenance/non-production of accounts and hence in our considered opinion, this issue stands covered in favour of the assessee by this Tribunal order. Since the deduction under s. 80P(2)(a)(vi) is granted to the present assessee in all preceding and succeeding years, and the assessee in these two years has also submitted the audit report as required under Maharashtra Co-op.


Both these appeals are Revenue s appeals for asst. yrs. 1995-96 and 1997-98 directed against orders of learned CIT(A), Thane, dt. 17th May, 1999 and 7th Jan., 2003, respectively and since common issues are involved, both these appeals are being disposed of by this common order for sake of convenience. In both years, Revenue has raised various grounds but only grievance of Revenue in both years is that assessee is not entitled to deduction under s. 80P(2)(a)(vi). Briefly stated, facts are that assessee is labour co-operative society which is registered under Maharashtra Co-operative Societies Act. In both these years, assessee filed returns of income showing Nil income after claiming deduction under s. 80P(2)(a)(vi). assessee has also filed copies of trial balance, P&L a/c and audit report as required under Maharashtra Co-op. Societies Act in both years along with return of income. However, AO rejected claim of assessee for deduction under s. 80P(2)(a)(vi) in both years, as assessee could not produce books of account in both years. After rejecting claim of assessee for deduction under s. 80P(2)(a)(vi), AO estimated assessee s net profit @ 8 per cent of its turnover in both years. On appeal, it was held by learned CIT(A) that assessee is entitled to deduction under s. 80P(2)(a)(vi) by holding that since AO has allowed deduction under s. 80P(2)(a)(vi) in preceding and succeeding year, there is no reason to deny deduction in these two years particularly when members o f society were same in these two years and preceding and succeeding years. It is also held by him that deduction cannot be denied merely for reason that books of account could not be produced. Regarding quantification of income @ 8 per cent of turnover, it was held by learned CIT(A) that since it is held that whole of assessee s income is entitled to deduction under s. 80P(2)(a)(vi), question of quantification now remains of no consequence and this ground was dismissed as infructuous. Now, Revenue is in appeal before us. It is submitted by learned Departmental Representative of Revenue that after giving various opportunities to produce books, AO has carried out survey under s. 133A on 10th Dec., 1996 and in course of survey, AO did not find any books of account or other records. It was stated by chairman of society that books of account and other records were lost while coming from Mumbai to Ulhasnagar and complaint is stated to have been filed with Kalyan Railway Police Station on 23rd Nov., 1996. It is also submitted that various opportunities were given to assessee to produce books prior to so-called loss of books on 23rd Nov., 1996 and hence AO is correct in holding that no books were maintained and he has rightly rejected claim of assessee for deduction under s. 80P. It was urged by him that order of learned CIT(A) should be reversed in both years and that of AO should be restored. Reliance was placed on following judgments: Mohd. Haron & Co. vs. CIT (2005) 274 ITR 490 (All); Hargopal Singh vs. CIT (2004) 191 CTR (P&H) 168: (2005) 273 ITR 507 (P&H); Bansiwala Iron & Steel Rolling Mills vs. CIT (2004) 190 CTR (Raj) 449: (2005) 272 ITR 624 (Raj). As against this, learned Authorised Representative of assessee supported order of learned CIT(A) in both years and it was submitted that sub-s. (2) of s. 80P only quantifies deduction and not entitlement of deduction. It is also submitted that p. 48 of paper book contains police complaint. It was also submitted that deduction under s. 80P cannot be denied merely for reason that books were not produced and in support of this contention, reliance was placed on following Tribunal judgments, copies of which were filed: (a) ITO vs. Jaknush Majur Kamgar Sahakari Society Ltd. (ITA Nos. 3615, 3619 & 3620/Mum/1999, dt. 25th June, 2001) (b) ITO vs. Sri Sainath Majur Kamgar Sahakari Society Ltd. (ITA Nos. 129 to 132/Mum/2002, dt. 4th Nov., 2004). We have considered rival submissions, perused materials on record and have gone through judgments cited by both sides. We find that judgments cited by learned Departmental Representative are not applicable in present case with regard to allowability of deduction under s. 80P because all these judgments are in connection with rejection of books of account under s. 145. In Tribunal judgment relied upon by learned Authorised Representative of assessee rendered in case of Jaknush Majur Kamgar Sahakari Society Limited (supra), issue has been decided by learned CIT(A) in favour of assessee by holding that deduction under s. 80P(2)(a)(vi) cannot be denied only on account of non-maintenance/non-production of accounts as per para No. 18 of order of learned CIT(A), as reproduced on p. 5 of Tribunal order and this order of learned CIT(A) has been upheld by Tribunal. In present case also, only reason given by AO to deny deduction under s. 80P(2)(a)(vi) is non-maintenance/non-production of accounts and hence in our considered opinion, this issue stands covered in favour of assessee by this Tribunal order. Since deduction under s. 80P(2)(a)(vi) is granted to present assessee in all preceding and succeeding years, and assessee in these two years has also submitted audit report as required under Maharashtra Co-op. Societies Act and also tax audit report, it is obvious that all conditions of s. 80P are being satisfied by assessee and hence by respectfully following abovesaid Tribunal order, we hold that deduction under s. 80P cannot be denied only on account of non-maintenance/non-production of books of account. In view of above, we do not find any reason to interfere in orders of learned CIT(A) in both years and same are upheld. In result, both these appeals of Revenue stand dismissed. *** INCOME TAX OFFICER v. SHERAWALI MAJUR KAMGHAR SAHAKARI SANSTHA LTD.
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