Case Law Details
DCIT Vs Kaira District Co-op Milk Producers Union Limited (ITAT Ahmedabad)
ITAT Ahmedabad held that grant received under Sampoorna Gramin Swarojgar Yogna (SGSY) from Government of Gujarat and interest earned on such grant cannot be treated as revenue receipt. Accordingly, the same is not liable to be taxed.
Facts- The assessee is a Co-operative Society deriving income from the business of manufacturing and marketing milk and milk products. The assessee’s case was taken up for scrutiny assessment and made various disallowances and the A.O. determined the total income at Rs. 5,58,77,595/- and raised a demand of Rs. 2,62,73,660/-.
Commissioner of Income Tax (Appeals) partly allowed the assessee appeal by deleting the various disallowances made by the Ld. A.O. Aggrieved against the same, the Revenue is in appeal.
Conclusion- Held that grants received under Sampoorna Gramin Swarojgar Yogna (SGSY) from Government of Gujarat cannot be treated as revenue receipt of the assessee as it was received specifically towards attainment of objectives enumerated in the MOU between the appellant, District Rural Development Agency, Nadiad (DRDA) and Commissioner, Rural Development, Government of Gujarat, Gandhinagar and assessee had no authority to use this grant towards its normal business activities.
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