PCIT Vs Sabarkantha District Co. Op. Milk Producers Union Ltd. (Gujarat High Court)
Summary: The Gujarat High Court dismissed the Revenue’s Tax Appeals arising from the common order dated 19.02.2025 passed by the Income Tax Appellate Tribunal, Ahmedabad, concerning Assessment Years 2016-17 and 2018-19. The appeals raised questions concerning deduction under Section 80P(2)(d) of the Income-tax Act, 1961, additional depreciation under Section 32(1)(iia), and the eligibility of milk cans and equipment used for artificial insemination and laboratory testing for additional depreciation.
The assessee, a Cooperative Society engaged in procurement of milk and related activities, had filed its return for A.Y. 2016-17 on 30.11.2016 declaring total income of Rs.11,05,58,640/-. During scrutiny, the Assessing Officer proposed disallowance of the interest and dividend income claimed as deductible under Section 80P(2)(d). The Assessing Officer also disallowed additional depreciation of Rs.8,31,15,592/- relating to additions in new machinery in the preceding year and additional depreciation of Rs.1,07,64,866/- claimed on Milk Cans and equipment. The CIT(A), relying upon the assessee’s own case for A.Y. 2012-13, allowed the assessee’s appeals. The Tribunal subsequently dismissed the Revenue’s appeal.
On the Section 80P(2)(d) issue, the Revenue’s Senior Standing Counsel submitted that the issue was no longer res integra and was covered by the Gujarat High Court’s earlier decision in the assessee’s own case in Tax Appeal No. 473 of 2014. In that decision, the Court had upheld the deduction under Section 80P(2)(d) on interest earned from investments with Cooperative Banks and Societies, observing that the statutory requirement was satisfied where the income was received from investments in Cooperative Societies and Cooperative Banks. The Court therefore held that the issue raised in Question A stood settled against the Revenue.
