Kaira District Co-operative Milk Producer Union Ltd. vs Commissioner of Income Tax

M.S. Shah, J.—In this reference at the instance of the assessee, the following questions are referred for our opinion in respect of the assessment year 1976-77 :

"1. On the facts and circumstances of the case, whether the Appellate Tribunal was right in its interpretation and application of Section 35C of the Income Tax Act, 1961 ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the entire expenditure of Rs. 39,24,979 was not eligible for weighted deduction u/s 35C ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that only ten per cent. of the expenses incurred on dissemination of information or demonstration of modern techniques and the methods of agricultural, animal husbandry or dairy or poultry farming or advice on such techniques or methods is eligible for weighted deduction u/s 35C of the Act ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the cost price of milk powder and soya flour received by the union from the UNICEF free of charge is not deductible in the computation of the total income ?"

We have heard Mr. Manish J. Shah, learned counsel for the applicant-asses-see, and Mr. Tanvish Bhatt, learned standing counsel for the Revenue.

At the hearing today, our attention is invited to the decision of this court in Kaira Dist. Co-op. Milk Producers Union Ltd. Vs. Commissioner of Income Tax, , which has concluded the controversy covered by the first three questions and the questions have been answered in favour of the assessee.

Following the aforesaid decision, we answer questions Nos. 1 to 3 in the negative, i.e., in favour of the assessee and against the Revenue.

Coming to question No. 4, our attention is invited to the decision of this court in CIT v. Kaira District Co-operative Milk Producers'' Union Ltd. [2001] 247 ITR 314, where also the controversy raised by this question has been concluded in favour of the assessee.

Following the aforesaid decision, we answer question No. 4 in the negative, i.e., in favour of the assessee and against the Revenue.

The reference accordingly stands disposed of with no order as to costs.