2019 (10) TMI 17 - AT - Income Tax

Deduction u/s 80P(2)(a)(vi) - HELD THAT - Contention of the assessee is that the A.O. ought to have allowed deduction. It is stated that assessee is a co- operative society engaged in the collective disposal of labour and also engaged in providing marketing of agricultural produce grown by its members. It is contended that the authorities below have not considered the submissions in right perspective. Ld. Counsel submitted that if the assessee was not eligible for one clause, it would certainly eligible for another clause of the same section. It is incumbent upon the assessing officer to provide deduction, if it is available. Facts on record suggest that the submissions of the assessee ought to have been considered by the authorities below. We therefore, set aside the impugned order of the Ld. CIT(A) and restore the issue to the file of the A.O. to decide after considering all the submissions of the assessee and verifying its claim. The grounds raised in the appeal are allowed for statistical purposes.

Summary

Issues:
1. Disallowance of deduction u/s 80P(2)(a)(vi) by CIT(A)
2. Failure to consider alternate claim of deduction u/s 80P(2)(a)(iii)

Analysis:

Issue 1: Disallowance of deduction u/s 80P(2)(a)(vi) by CIT(A)
The assessee, a cooperative society engaged in poultry farming, claimed a deduction of ?11,68,222 under section 80P(2)(a)(vi) of the Income Tax Act, 1961. However, the Assessing Officer (A.O.) disallowed this claim during scrutiny proceedings. The CIT(A) upheld the A.O.'s decision. The assessee contended that it should be eligible for deduction under the said section or under an alternate clause if not eligible under one clause. The ITAT found that the authorities had not considered the submissions of the assessee properly. Consequently, the ITAT set aside the CIT(A)'s order and remanded the issue back to the A.O. for reevaluation considering all the submissions and verifying the claim. The grounds raised by the assessee were allowed for statistical purposes.

Issue 2: Failure to consider alternate claim of deduction u/s 80P(2)(a)(iii)
In a separate appeal for the assessment year 2014-15, the assessee raised similar grounds regarding the disallowance of ?15,63,594 under section 80P(2)(a)(vi) and the failure to consider an alternate claim under section 80P(2)(a)(iii). The ITAT, after hearing both parties and reviewing the records, noted that the facts were identical to the previous assessment year. Following the same reasoning as in the earlier case, the ITAT remanded the issue back to the A.O. for fresh consideration. The appeals filed by the assessee were allowed for statistical purposes in this instance as well.

In conclusion, the ITAT, in both appeals, found that the authorities had not properly considered the submissions of the assessee regarding the eligibility for deduction under relevant sections of the Income Tax Act. The ITAT, therefore, set aside the CIT(A)'s orders and directed the A.O. to reevaluate the claims in light of all submissions provided by the assessee. The appeals were allowed for statistical purposes, and the decisions were pronounced in open court on 27th September 2019.