2019 (1) TMI 741 - AT - Income Tax

Grant of deduction u/s 80P(2)(d) - assessee has not claimed any deduction in the computation of income - Held that - The assessee has not placed on record copy of computation of income. Though the assessee is possessing acknowledgement which was produced before us but from this acknowledgement complete details of the income computed by the assessee for the purpose of taxation are not discernible. Therefore we deem it appropriate to set aside the issue to the file of the AO for verification. AO shall examine computation of income and if it reveals that no deduction under section 80P(2)(d) qua this interest income is claimed by the assessee then there could not be any disallowance because that will amount to double disallowance. Once the assessee has not claimed; twice the AO himself has carved out this amount and made addition. In case if such deduction is not claimed in computation of income then no disallowance be made to the total income of the assessee. The AO shall decide the issue in accordance with law. - Appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
1. Appeal against order of ld.CIT(A)-5, Ahmedabad dated 30.5.2017 for the Asstt.Year 2013-14.
2. Eligibility for deduction under section 80P(2)(d) of the Income Tax Act, 1961.
3. Disallowance of deduction by the ld.AO.
4. Verification of computation of income by the AO.

Analysis:
The appellant appealed to the Tribunal against the order of ld.CIT(A)-5, Ahmedabad for the Asstt.Year 2013-14. The grounds of appeal were found to be descriptive and argumentative, not in line with Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963. The grievance of the assessee was regarding the disallowance of deduction amounting to ?7,70,959 under section 80P(2)(d) of the Income Tax Act, 1961.

Upon careful review of the records, it was noted that the assessee, formerly a cooperative bank, had its license canceled by the Reserve Bank of India and was being assessed as a credit society. The ld.AO disallowed the deduction claimed under section 80P(2)(d) for interest income earned on deposits with Gujarat State Cooperative Bank, resulting in an addition to the income. The appeal to the ld.CIT(A) did not provide relief to the assessee.

During the proceedings, the ld.counsel for the assessee clarified that no deduction was claimed in the computation of income, challenging the disallowance made by the AO. The Tribunal observed that the assessee had not provided a copy of the computation of income, leading to a lack of clarity on the claimed deductions. Consequently, the issue was remanded to the AO for verification. It was directed that if no deduction under section 80P(2)(d) was claimed in the computation of income, the disallowance made by the AO would be unwarranted to avoid double disallowance.

The Tribunal emphasized that its decision would not prejudice the case of the AO or the defense of the assessee during the proceedings before the AO. Ultimately, the appeal of the assessee was allowed for statistical purposes, with the order pronounced on 11th January, 2019 at Ahmedabad.