2018 (6) TMI 1576 - AT - Income Tax

Deduction u/s 80P - respect of certain receipts, i.e. Electricity Commission, Bank Interest - HELD THAT - Electricity Commission held allowable following BANGANGA NAGRI SAH. PATSANSTHA LTD. 2016 (4) TMI 473 - ITAT PUNE - Bank Interest has already been settled by the Apex Court in the case of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. 2005 (8) TMI 28 - SUPREME COURT OF INDIA allowed in favour of assessee. Allowability of deduction u/s 80P - interest receipts received out of deposits with MSEB and the Advertisement Income earned by the assessee, it is the claim of assessee that the said receipts are also entitled to the deduction - HELD THAT - Considering the principle of parity with that of Electricity Commission and Bank Interest as such, there are no case laws filed by the assessee in respect of his claim for deduction in these receipts, nobody has examined the principle of parity as claimed by the assessee. The issues of MSEB Deposit Interest and Advertisement Income are set-aside to the file of AO with a direction to verify the nexus and admissibility of the claim of assessee in the light of above cited decisions by the assessee and adjudicate the same afresh. AO shall afford reasonable opportunity of hearing to the assessee while deciding the issues. Appeal of the assessee is partly allowed for statistical purposes.

Summary

Issues:
- Deduction under section 80P of the Income Tax Act for various receipts
- Denial of deduction by the Assessing Officer and CIT(A)
- Appeal filed before the Tribunal challenging the denial of deduction
- Specific grounds of appeal related to income classification and double assessment
- Arguments presented by the assessee and the Revenue
- Tribunal's decision on each issue raised in the appeal

The judgment pertains to an appeal filed by a Co-operative Credit Society against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2011-12. The assessee claimed deduction under section 80P of the Income Tax Act for receipts including Electricity Commission, Bank Interest, MSEB Deposit Interest, and Advertisement Income. The Assessing Officer denied the deduction, leading to the appeal. The assessee argued extensively during the first appellate proceedings, citing relevant decisions in support of the deduction claim. However, the CIT(A) did not find the cited decisions relevant and denied the deduction for the mentioned receipts.

The assessee's appeal before the Tribunal raised specific grounds, including the classification of income under "Income from Other Sources" instead of "Income from Business" in the tax return, denial of deduction under section 80P(2)(a) for the assessed income, and alleged double assessment of a certain amount. The assessee's counsel presented arguments supported by case laws and decisions favoring the deduction claim for each receipt. The Revenue vehemently opposed the assessee's contentions during the proceedings.

The Tribunal analyzed each issue raised in the appeal. It found that the eligibility of deduction for Electricity Commission was supported by a previous decision involving similar circumstances. The Tribunal also referenced a Supreme Court decision and a CBDT Circular to allow the deduction for Bank Interest. However, regarding MSEB Deposit Interest and Advertisement Income, as no specific case laws were presented, the Tribunal remanded these issues to the Assessing Officer for further examination based on the principle of parity with the allowed deductions. The Tribunal directed the Assessing Officer to reevaluate these receipts and provide a fair opportunity for the assessee to present their case.

In conclusion, the Tribunal partly allowed the assessee's appeal for statistical purposes, granting relief on the issues of Electricity Commission and Bank Interest based on established legal precedents. The issues related to MSEB Deposit Interest and Advertisement Income were remanded to the Assessing Officer for a fresh assessment in line with the principles discussed during the proceedings. The judgment was pronounced on June 20, 2018.