2021 (12) TMI 1288 - AT - Income Tax

Deduction u/s 80P(2)(a)(i) - entitlement to deduction u/s 80P(2)(a)(i) on interest income - HELD THAT - Assessee has not claimed deduction of interest from bank under section section 80P(2)(a)(i) of the Income Tax Act, therefore, no disallowance should be made. However, the assessing officer made disallowance under section section 80P(2)(a)(i) of the Income Tax Act, on account of interest other than co-operative bank. As the assessee society had received interest other than from Co-op. Societies which was not claimed by the assessee but disallowed by the assessing officer. Therefore, we remit this issue back to the file of the assessing officer to examine whether assessee has claimed the deduction or not? If the assessing officer finds that assessee has not claimed deduction then in that situation the assessing officer should not make addition, hence, for statistical purposes, the additional ground raised by the assessee is treated to be allowed.

Summary

Issues:

1. Claim of deduction u/s 80P(2)(a)(i) of the Income Tax Act on interest income.
2. Disallowance of claimed deduction by the Assessing Officer.
3. Additional grounds raised by the assessee challenging the disallowance.
4. Verification of the claimed deduction by the assessing officer.
5. Decision on the additional grounds for statistical purposes.

Analysis:

1. The appeal pertains to the claim of deduction u/s 80P(2)(a)(i) of the Income Tax Act on interest income. The assessee contested the order passed by the Learned Commissioner of Income Tax (Appeals) concerning the assessment year 2012-13.

2. The grounds of appeal raised by the assessee primarily challenged the disallowance of the deduction under section 80P(2)(a)(i) of the Act on interest income. The assessee argued that the disallowance was unjustified both in law and on factual grounds.

3. The assessee also raised two additional grounds challenging the disallowance made by the Assessing Officer. These additional grounds questioned the confirmation of the disallowance and the direction to allow only proportionate expenses out of the interest income.

4. The assessing officer disallowed a specific amount under section 80P(2)(a)(i) of the Act, which the assessee had not claimed as a deduction. The Tribunal admitted the additional ground raised by the assessee based on legal principles and existing facts on record.

5. The Tribunal remitted the issue back to the assessing officer to verify whether the assessee had indeed claimed the deduction in question. If the assessing officer confirms that no such claim was made, then the disallowance should not stand. The appeal was allowed for statistical purposes based on the admission of the additional grounds.

6. Consequently, since the appeal was allowed for statistical purposes due to the admission of the additional grounds, other grounds raised by the assessee on merits were deemed infructuous and not adjudicated upon.

7. Ultimately, the assessee's appeal was allowed for statistical purposes, and the order was pronounced on 24/12/2021 in accordance with Rule 34(5) of the Income Tax (Appellate Tribunal) Rules 1963.