Mehsana District Co-operative Milk Producers Union Ltd. vs Commissioner of Income Tax

A.R. Dave, J.

At the instance of the assessee as well as the revenue, the following 9 questions have been referred to this court for its opinion by the Tribunal, Ahmedabad Bench ''A'' under the provisions of section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as ''the Act'') :

At the instance of the assessee :

Whether, on the facts and in the circumstances of the case, the 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 Tribunal was right in holding that entire expenditure of Rs. 27,80,627 was not eligible for weighted deduction u/s 35C of the Income Tax Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that only 10 per cent of the expenses incurred on dissemination of information or demonstration of modern techniques and methods of agricultural animal husbandry or dairy or poultry-farming or advice on such technique or method is eligible for deduction u/s 35C of the Income Tax Act ?

At the instance of the revenue :

Whether the Tribunal has been right in law and on facts in coming to the opinion that the relief u/s 35C of the Income Tax Act, 1961, requires to be granted to the assessee at 10 per cent of the expenditure as claimed by the assessee for assessment year in question ?

At the instance of the assessee :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in treating the roads as ''Building'' and not eligible to depreciation as ''plant'' ?

At the instance of the revenue :

Whether the assessee is entitled in law to the depreciation on fencing at the rate of 10 per cent applicable to plant ?

At the instance of the assessee :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that contribution made as per the provisions of section 69 of the Gujarat Rajya Sahakari Co-operative Societies Act is not deductible in computation of total income?

At the instance of the revenue :

Whether the Tribunal has not erred in law and on facts in holding that work-in-progress should be included in computation of capital employed for granting relief as claimed for assessment year 1979-80 ?

At the instance of the assessee :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that depreciation is not admissible on 30 per cent of the value of the plant and machinery received by way of subsidy from the government ?

So far as question Nos. 1 to 4 are concerned, it has been submitted by the learned advocates that this court has decided the said issues in IT Ref. No. 32 of 1987 [reported as Kaira District Co-operative Milk Producer Union Ltd. Vs. Commissioner of Income Tax, . As per the law laid down by this court, all the first four questions, which have been referred to this court hereinabove, shall have to be answered in the negative i.e., in favour of the assessee and against the revenue.

So far as question No. 5 is concerned, it has been submitted by the learned advocates that the said question has been answered in case of CIT v. Kaira District Co-operative Milk Producers'' Union Ltd. (2001) 247 ITR 314 . In view of the ratio of the judgment delivered in the said case, we answer question No. 5 in the affirmative, i.e., in favour of the revenue and against the assessee.

So far as question No. 6 is concerned, it has been submitted by the learned advocates that the said question has been answered in IT Ref. No. 55/98. It has been answered in the negative. We, therefore, answer the said question in the negative, i.e., against the assessee and in favour of the revenue.

So far as question No. 7 is concerned, it has been submitted by the learned advocates that the said question has also been answered in case of CIT v. Kaira District Co-operative Milk Producers'' Union Ltd. (supra). In view of the ratio of the said judgment, we answer question No. 7 in the negative, i.e., in favour of the assessee and against the revenue.

So far as question No. 8 is concerned, it has been submitted that the said question has been answered in the affirmative in case of Commissioner of Income Tax Vs. Alcock Ashdown and Co. Ltd. and Filtrone India Ltd., . In the circumstances, in respectful agreement with the said judgment, we answer the said question in the affirmative, i.e., in favour of the assessee and against the revenue.

So far as the last question, namely, question No. 9 is concerned, it has been submitted by the learned advocates that the said question has also been decided by this court in the case of the assessee itself in IT Ref. No. 290/84. As per the said judgment, the Tribunal was in error in holding that depreciation was not admissible on 30 per cent of the value of the plant and machinery which was received by way of subsidy from the government. In view of the judgment delivered in IT Ref. No. 290/84, we answer question No. 9 in the negative, i.e., in favour of the assessee and against the revenue.

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

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