9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 944 - AT - Income TaxDisallowing the claim of deduction u/s 80P(2)(a)(i) - HELD THAT - The Hon ble Apex Court in the case of The Mavilayi Service Co-operative Bank Ltd. Ors. v. CIT 2021 (1) TMI 488 - SUPREME COURT had held that the expression members is not defined under the Income-tax Act. Hence, it is necessary to construe the expression members in section 80P(2)(a)(i) of the I.T.Act as it is contained in the respective State Co-operative Act. A.O. has merely denied the benefit of deduction u/s 80P(2)(a)(i) of the I.T.Act for the reason that the assessee was also dealing with associate / nominal members, which is against the dictum laid down by the Hon ble Apex Court in case of Mavilayi Service Cooperative Bank Ltd. Ors. (supra). The Hon ble Apex Court has settled many issues. The instant case needs to be examined by the A.O. in light of the principles enunciated by the Hon ble Apex Court in case of Mavilayi Service Co-operative Bank Ltd. Ors. (supra). Accordingly, the CIT(A) order on this issue is set aside and the same is restored to the files of the A.O. for examination of the case in the light of the principles laid down by the Hon ble Apex Court in the case of The Mavilayi Service Co-operative Bank Ltd. Ors. v. CIT (supra). It is ordered accordingly. Claim of deduction u/s 80P(2)(a)(i) of the I.T.Act with regard to interest income earned from fixed deposit kept with Co-operative Banks - In view of the above co-ordinate Bench order in the case of M/s.Raithara Seva Sahakara Sangh 2019 (1) TMI 282 - ITAT BANGALORE we restore the issue of claim of interest income received from other cooperative banks to the files of the A.O. for de novo consideration. A.O. shall follow the directions of the Tribunal contained (supra). Appeal filed by the assessee is allowed for statistical purposes.
Issues:
1. Disallowance of deduction u/s 80P(2)(a)(i) of the I.T.Act by CIT(A) 2. Taxability of interest earned from deposits with Co-operative Banks u/s 56 of the I.T.Act Issue 1: Disallowance of deduction u/s 80P(2)(a)(i) of the I.T.Act by CIT(A): The appellant, a Co-operative Society, filed a return for the assessment year 2016-2017 claiming a deduction u/s 80P of the I.T.Act. The Assessing Officer disallowed the deduction stating that the principles of mutuality did not exist between regular, nominal, and associate members of the society, citing a judgment of the Hon’ble Apex Court. The CIT(A) upheld this decision. However, the appellant cited a recent judgment of the Hon’ble Apex Court in favor of the deduction claim. The ITAT Bangalore noted that the A.O. had denied the deduction based on the membership structure, contrary to the principles laid down by the Hon’ble Apex Court in another case. Consequently, the ITAT set aside the CIT(A) order and directed the A.O. to reexamine the case considering the principles established by the Hon’ble Apex Court, thereby allowing the appeal. Issue 2: Taxability of interest earned from deposits with Co-operative Banks u/s 56 of the I.T.Act: Regarding the interest income earned from fixed deposits with Co-operative Banks, the appellant relied on a judgment of the Hon’ble Karnataka High Court to support the deduction claim u/s 80P(2)(a)(i) of the Act. The ITAT noted a previous decision of the Tribunal in a similar case, where the matter was remanded to the A.O. for fresh consideration. The ITAT observed that the source of funds for investments remained the same in different assessment years, and the nature of interest income was identical. Therefore, the ITAT directed the A.O. to reevaluate the issue in light of the judgments of the Hon’ble Apex Court and the Hon’ble Karnataka High Court, allowing the appellant to present additional evidence if necessary. Consequently, the ITAT remanded the issue back to the A.O. for fresh consideration, following the directions of the Tribunal. The appeal was allowed for statistical purposes. In conclusion, the ITAT Bangalore, in its judgment, addressed the issues of disallowance of deduction u/s 80P(2)(a)(i) and the taxability of interest income earned from deposits with Co-operative Banks. The ITAT set aside the CIT(A) order for the first issue and directed the A.O. to reexamine the case based on relevant legal principles. For the second issue, the ITAT remanded the matter back to the A.O. for fresh consideration, following the guidance of previous judgments.
|
