9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 1448 - AT - Income TaxEligibility for deduction u/s 80P (2) - Assessee Society as not a cooperative Bank - investment or deposit in bank was out of assessee s own funds - Held that - In the present case, there is no discussion in the orders of the lower authorities on this factual aspect as to whether the deposit in bank was out of assessee s own funds or out of liability and therefore, we feel it proper to set aside the order of CIT(A) and restore the matter back to the file of AO for fresh decision after examining the facts of present case in the light of these two judgments of Hon ble Karnataka High Court rendered in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. vs. ITO 2015 (2) TMI 995 - KARNATAKA HIGH COURT and in the case of PCIT and Another Vs.Totagars Co-operative Sale Society Ltd. 2017 (7) TMI 1049 - KARNATAKA HIGH COURT and also the judgment of Hon ble Apex Court rendered in the case of The Totgars Cooperative Sale Society Limited Vs. ITO 2010 (2) TMI 3 - SUPREME COURT and then decide the issue afresh - Appeal filed by the revenue as allowed for statistical purposes.
Issues:
1. Assessment of whether the assessee Society is a cooperative Bank. 2. Eligibility of the assessee for deduction U/s 80P (2). 3. Interpretation of the term "Cooperative Bank" under the Income Tax Act, 1961. 4. Examination of conflicting judgments from Hon'ble Karnataka High Court and Hon'ble Apex Court regarding the nature of funds used for bank deposits. Analysis: Issue 1: Assessment of Cooperative Bank Status The appeal challenges the order of the ld. CIT (A) regarding the nature of the assessee Society as a cooperative Bank. The revenue contends that the Society exhibits characteristics of a bank despite the CIT (A) ruling otherwise. The revenue argues that the insertion of clause (viia) in section 2(24) of the Income Tax Act, 1961 by the Finance Act, 2016 should be considered. The Tribunal noted conflicting judgments from Hon'ble Karnataka High Court and Hon'ble Apex Court, emphasizing the distinction between funds sourced from the assessee's own funds versus liabilities for bank deposits. Due to the lack of discussion on this factual aspect in the lower authorities' orders, the Tribunal set aside the CIT (A) order and remanded the matter to the AO for a fresh decision after examining the facts in light of relevant judgments. Issue 2: Eligibility for Deduction U/s 80P (2) The question of whether the assessee is eligible for deduction U/s 80P (2) was raised in the appeal. The revenue disputed the CIT (A) decision, arguing that the assessee is not entitled to the deduction as per the provisions of section 80P. The Tribunal, while remanding the matter to the AO for fresh consideration, directed the AO to assess the applicability of the judgment of the Hon'ble Apex Court in the case of Citizen Co-operative Society Limited vs. ACIT, 397 ITR 1. This judgment was deemed relevant for determining the cooperative bank status of the assessee. Issue 3: Interpretation of "Cooperative Bank" The interpretation of the term "Cooperative Bank" under the Income Tax Act, 1961 was a key point of contention in the appeal. The revenue and the assessee presented arguments based on legal precedents from Hon'ble Karnataka High Court and Hon'ble Apex Court. The Tribunal highlighted the need for a thorough examination of the judgments to determine the nature of the assessee Society accurately. In conclusion, the Tribunal allowed the appeal filed by the revenue for statistical purposes, remanding the matter to the AO for fresh assessment in consideration of the conflicting judgments and legal provisions related to the cooperative bank status and eligibility for deductions under section 80P (2).
|
