9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1883 - AT - Income TaxDeduction u/s. 80P(2)(a)(i) - interest received on term deposit from SBI - HELD THAT - As assessee has claimed deduction on above said interest income u/s. 80P(2)(a)(i) of the Act only and not u/s 80P(2)(d) claim is to be allowed as relying on the case of Shri Tatyasaheb Mohite Nagari Sahakari Patpedhi Ltd. 2018 (4) TMI 446 - ITAT MUMBAI as stating that the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. The order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. - Decided in favour of assessee. Deduction u/s. 80P(2)(a)(i) on commission income earned by the assessee from Maharashtra State Electricity Board (MSEB) - As relying on DRONAGIRI NAGRI SAHAKARI PATSANSTHA MARYADIT VERSUS THE INCOME TAX OFFICER, WARD-3, PANVEL 2018 (6) TMI 1576 - ITAT PUNE we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to allow deduction u/s. 80(P)(2)(a)(i) of the Act in respect of commission income also. - Decided in favour of assessee.
Issues:
1. Disallowance of deduction claimed under section 80P(2)(a)(i) of the Act for interest income from deposits with State Bank of India. 2. Disallowance of deduction claimed under section 80P(2)(a)(i) of the Act for commission income from Maharashtra State Electricity Board (MSEB). 3. Initiation of penalty under section 271(1)(c) of the Act and interest under section 234A, B, C, & D. 4. Confirmation of contentions by the Assessing Officer by the Commissioner of Income Tax (A). Issue 1: Disallowance of Interest Income Deduction: The assessee, a credit cooperative society, earned interest income on fixed deposits with State Bank of India. The Assessing Officer disallowed the deduction under section 80P(2)(d) of the Act. The CIT(A) confirmed this disallowance. However, the ITAT, following a precedent, held that the interest income is attributable to the business of providing credit facilities, making it eligible for deduction under section 80P(2)(a)(i) of the Act. The decision was based on the wider interpretation of "attributable to" as compared to "derived from" and the principle that interest income from such deposits is part of the business income. The ITAT directed the AO to allow the deduction. Issue 2: Disallowance of Commission Income Deduction: The Assessing Officer disallowed the deduction claimed on commission income from MSEB under section 80P(2)(a)(i) of the Act, considering it as income from a non-member under section 80P(2)(c). The CIT(A) upheld this disallowance. However, the ITAT, relying on a Pune Bench decision, allowed the deduction, stating that the commission income from MSEB was part of the business activity and hence eligible for deduction under section 80P(2)(a)(i) of the Act. The ITAT directed the AO to allow the deduction in this regard as well. Issue 3: Penalty and Interest Initiation: The initiation of penalty under section 271(1)(c) of the Act and interest under section 234A, B, C, & D was raised as an issue. However, no detailed analysis or decision regarding this issue was provided in the judgment. Issue 4: Confirmation of Assessing Officer's Contentions: The contention raised by the Assessing Officer was confirmed by the Commissioner of Income Tax (A). This issue was not specifically addressed or reversed in the judgment, indicating a lack of challenge or disagreement with the decision made at that level. In conclusion, the ITAT ruled in favor of the assessee, allowing the deductions for both interest income from deposits with State Bank of India and commission income from MSEB under section 80P(2)(a)(i) of the Act. The judgment highlighted the importance of considering the nature of income in relation to the business activity of the assessee when determining eligibility for deductions under the specified sections of the Act.
|
