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2016 (3) TMI 1278 - AT - Income Tax


Issues Involved:
1. Deduction under secs. 80P(2)(a)(i) and 80P(2)(c)(ii) of the Income Tax Act, 1961.
2. Addition made under sec. 40(a)(ia) of the Act.

Analysis:

Issue 1: Deduction under secs. 80P(2)(a)(i) and 80P(2)(c)(ii) of the Income Tax Act, 1961:
The main issue in this appeal was whether the assessee was entitled to deduction under secs. 80P(2)(a)(i) and 80P(2)(c)(ii) of the Income Tax Act. The Assessing Officer had rejected the claim of deduction under sec. 80P(2) on the grounds that the assessee was a cooperative bank and not entitled to claim deduction under sec. 80P(4). However, the Commissioner of Income Tax (Appeals) allowed the claim of the assessee after analyzing the definition of a cooperative bank under the Banking Regulation Act, 1949. The Commissioner held that the appellant did not meet the criteria to be considered a primary cooperative bank as defined in the Act, and thus, was entitled to the deduction under sec. 80P(2)(a)(i) of the Act. The High Court's decision was relied upon to support this conclusion. The Revenue's appeal was dismissed as no error was found in the Commissioner's order.

Issue 2: Addition made under sec. 40(a)(ia) of the Act:
The second issue involved the addition made under sec. 40(a)(ia) of the Act concerning disallowance of interest payments without TDS. The Assessing Officer disallowed a certain amount under this provision, but the Commissioner of Income Tax (Appeals) deleted the disallowance. The basis for deletion was that since the assessee-society was not considered a bank, TDS provisions were not applicable. The Departmental Representative did not provide any submissions on this ground during the hearing, leading to the dismissal of the Revenue's appeal.

In conclusion, the appeal filed by the Revenue was dismissed, confirming the orders of the Commissioner of Income Tax (Appeals) regarding both the deduction under secs. 80P(2)(a)(i) and 80P(2)(c)(ii) and the addition made under sec. 40(a)(ia) of the Income Tax Act, 1961.

 

 

 

 

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