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2024 (6) TMI 1287 - AT - Income TaxIssues: - Denial of deduction under section 80P(2)(d) of the Income Tax Act. - Adjustment made under section 143(1) of the act. - Interpretation of cooperative society and eligibility for deduction. Analysis: 1. The appeal was filed against the denial of deduction under section 80P(2)(d) of the Income Tax Act by the Additional Commissioner/Joint Commissioner of Income Tax. The appellant, a cooperative housing society, claimed a deduction of Rs. 510,497 under section 80P(2)(d) for interest received from the Maharashtra State Cooperative Bank Limited. 2. The main issue was whether the adjustment made under section 143(1) of the act was valid. The appellant argued that the adjustment was beyond the powers granted under this section as there was no arithmetical error or incorrect claim apparent from the return. The denial of deduction was not a permitted adjustment under section 143(1), and the adjustment made by the central processing Centre was deemed invalid. 3. The interpretation of a cooperative society and eligibility for deduction under section 80P(2)(d) was crucial. The appellant contended that as a cooperative society receiving interest from another cooperative society, it was entitled to the deduction. The Tribunal agreed, emphasizing that the Maharashtra State Cooperative Bank was also a cooperative society under the Maharashtra cooperative societies act, making the appellant eligible for the deduction. 4. The Tribunal also noted that a previous decision in the appellant's favor for a similar issue in an earlier assessment year supported their entitlement to the deduction. The Tribunal disagreed with the lower authorities' reliance on a Supreme Court decision concerning a different type of cooperative society, emphasizing the benevolent nature of section 80P and the need for a liberal interpretation in favor of the assessee. 5. Ultimately, the Tribunal reversed the order of the Additional Commissioner/Joint Commissioner and directed the assessing officer to grant the deduction of Rs. 510,497 under section 80P(2)(d) of the Income Tax Act. The appeal of the assessee was allowed, highlighting the cooperative nature of the entities involved and the legislative intent behind section 80P.
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