- (1.) THESE appeals under s. 260A of the IT Act, 1961 (for short the 'the Act of 1961' hereinafter) relating to asst. yrs. 1997 - Jodhpur Bench, Jodhpur (for short 'the Tribunal' hereinafter), in ITA Nos. 136/Jd/2003, 137/Jd/2003, 138/Jd/2003, 139/Jd/2003 and 349/Jd/2003 in respect of asst. yrs. 1997 -98, 1998 -99, 1999 -2000, 2000 -01, 2001 -02 respectively, were admitted by this Court on following substantial question of law : "Whether on the facts and in the circumstances of the case as well as in the law the learned Tribunal was justified in law in holding that income derived by the assessee society in the form of commission/margin is eligible for deduction under s. 80P(2)(e) whereas the facts remained that the society has not derived income from letting out of godowns or warehouse for storage, processing or facilitating the marketing of commodities as provided in the Act -
(2.) THE respondent assessee is a co -operative society involved in purchase and sale of controlled items. During the relevant assessment year the assessee claimed deduction under s. 80P(2)(e) of the Act of 1961, on account of commission received from the Government for stocking of controlled goods in its godowns. Thereafter, as and when required, these goods are sold by the assessee to various retailers authorised by the Government at the specified rate. In lieu of its services, the assessee is entitled to receive the cost of the goods sold, commission (margin) specified by the Government, octroi, transportation charges from railway station to godowns and handling charges at the rates specified by the Government from the retailers.
(3.) THE AO rejected the claim of the respondent assessee on the ground that the assessee did not receive any money from the Government either as commission or letting charges and no amount has been separately credited in the P&L a/c either as commission or letting charges. Accordingly, the AO arrived at the finding that since no amount is payable to the assessee as "letting charges of godown" such income arising to the assessee is not income from letting of godowns and consequently, the same is not eligible for deduction under s. 80P(2)(e) of the Act of 1961. The Commissioner of Income -tax (Appeals), Udaipur [in short 'the CIT(A)' hereinafter], while following the decision of the Tribunal in the case of the assessee in respect of earlier assessment year held that income received by the assessee in form of commission (margin) is entitled to the deductions under s. 80P(2)(e) of the Act of 1961.;