2013 (3) TMI 762 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) regarding disallowance of deduction u/s 80P(2)(a)(i) of the IT Act for assessment year 2007-08.

Summary:
1. The revenue appealed against the CIT(A)'s order deleting the disallowance of deduction u/s 80P(2)(a)(i) of the Act amounting to Rs. 13,25,411.
2. The assessee, a cooperative society providing credit facilities to members, filed its return for the assessment year 2007-08. The AO reopened the assessment u/s 147 and disallowed the deduction u/s 80P(2)(a)(i) based on the amendment inserting sub-section (4) of section 80P.
3. The CIT(A) considered relevant case laws, CBDT Circular, and RBI High Level Committee report, and deleted the disallowance, stating that the appellant is entitled to deduction u/s 80P(2) despite not being covered by section 80P(4).
4. The revenue appealed, arguing that the CIT(A)'s decision should be reversed based on the insertion of sub-section (4) of section 80P.
5. The AR relied on the CIT(A)'s order and cited a case where it was held that a cooperative credit society is entitled to deduction u/s 80P(2)(a)(i) as it is not the same as a cooperative bank.
6. After hearing both sides, it was concluded that the assessee, being a cooperative society and not a cooperative bank, is eligible for deduction u/s 80P(2)(a)(i) of the Act.
7. Consequently, the appeal of the revenue was dismissed.

Order pronounced on 07-03-2013.