2018 (9) TMI 1187 - AT - Income Tax

Deduction u/s 80P(2)(a) - eligibility to trade income and income from CAMPCO - Held that - There was no specific reasoning given by the assessee nor the CIT(A) for denying the benefit of deduction u/s 80P(2) of the I.T.Act. The trade income according to the assessee was earned by it on account of purchase and sale of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members. Income accrued from CAMPCO according to the assessee was on account of marketing of agriculture produce of its members. Therefore, it was submitted that such income was entitled to deduction u/s 80P(2)(a)(iii) and (iv) of the I.T.Act. Since the A.O. nor the CIT(A) has not given any specific reasons for denying the benefit of deduction claimed u/s 80P(2), we deem it appropriate to remand the case to the A.O. for fresh consideration. As regards the insurance commission assessee had received concerning the assessment years 2011-2012 and 2012-2013, there was no discussion by the A.O. nor the CIT(A) for disallowing the claim of deduction u/s 80P(2). It is the case of the assessee that it had earned commission from United India Insurance for crop insurance where the assessee-society was intermediary between the Insurance company and its members. Since there was no discussion by the A.O. nor by the CIT(A), we deem it appropriate to remit the issue to the Assessing Officer for de novo consideration.- Decided in favour of assessee for statistical purposes.

Summary

Issues:
Whether trade income and income from CAMPCO are entitled to deduction u/s 80P(2)(a) of the Income-tax Act, 1961.

Analysis:
The appeals were against the consolidated order of the CIT(A) for multiple assessment years. The primary issue in all appeals was the entitlement to deduction u/s 80P(2)(a) of the Income-tax Act. The Assessing Officer had denied the deduction, citing the insertion of section 80P(4) from 01.04.2007. The CIT(A) relied on a judgment and allowed the deduction but denied it for trade income and income from CAMPCO.

The assessee contended that the trade income was from supplying agricultural items to members, and CAMPCO income was from marketing agricultural produce, thus qualifying for deduction u/s 80P(2)(a)(iii) and (iv). The Tribunal noted the lack of specific reasoning for denial by the AO and CIT(A) and remanded the case for fresh consideration. The assessee was directed to provide evidence supporting the claim for deduction.

Regarding insurance commission for specific assessment years, no discussion was found for disallowing the deduction u/s 80P(2). The assessee argued the commission was earned as an intermediary for crop insurance and should be eligible for deduction. The Tribunal remitted this issue to the Assessing Officer for reconsideration.

Ultimately, the appeals were allowed for statistical purposes, with the case remanded for fresh consideration on the eligibility for deductions.