2013 (12) TMI 656 - AT - Income Tax

Deduction u/s 80P Held that - Following the assessee s own case for the A.Y. 2004-05 Although the assessee has furnished separate details of trading done with the members of society and with non-member public under the instruction and direction of the Government - A reliable bifurcation of sales activity cannot be made as the sales counter for member as well as non-member was same The assessee produced material for assessment year 2004-05 but there is no such material produced by the assessee during this year before the assessing officer - The appeal is restored for fresh judgement.

Summary

Issues:
1. Disallowance of deduction claimed under section 80P
2. Consideration of Trading account for transactions of sales and purchase
3. Disallowance of deduction under section 80P(2)(d)

Issue 1: Disallowance of deduction claimed under section 80P
The appellant contested the order under section 143(3) framed by the CIT(A) Jodhpur, claiming it to be bad in law and in facts. The main contention revolved around the disallowance of the deduction of Rs. 1554615/- claimed under section 80P. The appellant argued that the CIT(A) erred in not allowing proportional deduction under sections 80P(2)(a)(iii) and 80P(2)(a)(iv) based on the Trading account submitted. However, the CIT(A) upheld the action of the AO, citing that the bifurcation of trading was not reliable as it could not be determined that sales were made only to members. The CIT(A) relied on a prior decision for AY 04-05, stating that the issue was similar, and hence, the appellant was not entitled to the deduction under sections 80P(2)(a)(iii) and 80P(2)(a)(iv).

Issue 2: Consideration of Trading account for transactions of sales and purchase
The appellant had submitted a Trading account for transactions of sales and purchase with members and non-members of the society. The CIT(A) found that such bifurcation was not considered by the assessing officer and dismissed the issues raised by the appellant. However, the Tribunal directed the assessing officer to reconsider the issue by examining the chart showing the bifurcation of income activities covered under sections 80P(2)(a)(iii) and 80P(2)(a)(iv) produced before the CIT(A). The Tribunal emphasized that the issues needed to be reconsidered by the assessing officer with reference to the chart provided.

Issue 3: Disallowance of deduction under section 80P(2)(d)
The appellant claimed a deduction under section 80P(2)(d) during the appellate proceeding, which was not raised before the AO. The CIT(A) rejected this claim, stating that if a matter was not contested before the lower authority, it could not be raised before the appellate authority. The CIT(A) held that no deduction under section 80P(2)(d) was allowable as the claim was not made in the return of income or before the assessing officer. The Tribunal found the facts unclear on this issue and directed the AO to adjudicate afresh after providing a reasonable opportunity of hearing to the assessee.

In conclusion, the Tribunal upheld the disallowance of the deduction claimed under section 80P(2)(a)(iii) and 80P(2)(a)(iv) but directed the assessing officer to reconsider the issues related to the Trading account and the deduction under section 80P(2)(d) in accordance with the law. The appeal was dismissed for statistical purposes.