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2019 (8) TMI 1086 - AT - Income TaxDeduction u/s.80P(2) - Assessee is a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 providing credit facilities to its members - HELD THAT - We set aside the order of CIT(A) and restore the matter back to his file for fresh decision in the light of above discussion, by way of a speaking and reasoned order after providing adequate opportunity of being heard to both sides. CIT(A) is directed to pass a speaking and reasoned order after comparing the facts of present case with the facts in the case of The Citizen Co-operative Society Ltd. Vs. ACIT 2017 (8) TMI 536 - SUPREME COURT He is also directed to examine the facts of present case in the light of these two judgments of Hon'ble Karnataka High Court rendered in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO 2015 (2) TMI 995 - KARNATAKA HIGH COURT and PCIT and Another Vs. Totagars Co-operative Sale Society 2017 (7) TMI 1049 - KARNATAKA HIGH COURT and pass necessary order as per law in the light of above discussion after providing adequate opportunity of being heard to both sides - Appeal filed by the assessee is allowed for statistical purposes.
Issues involved:
1. Disallowance of deduction under Sec. 80P of the IT Act. Analysis: 1. The appellant, a co-operative society, contested the disallowance of its claim for deduction under Sec. 80P of the IT Act for the assessment year 2016-17. The appellant argued that the interest income earned from banks should be considered as part of its business income and be eligible for deduction under Sec. 80P. The authorities relied on judgments such as Totagars Co-operative Sale Society Ltd. and The Citizen Co-operative Society Ltd. to disallow the deduction. However, the appellant contended that these judgments were not directly applicable to its case and requested a fresh examination of the facts. The Tribunal agreed with the appellant's submissions and directed the CIT(A) to pass a speaking and reasoned order after comparing the facts of the present case with the relevant judgments, providing both parties with an opportunity to present their arguments. 2. The Tribunal emphasized the need for a detailed analysis of the facts in light of the judgments cited by both parties. Specifically, the Tribunal highlighted the importance of determining whether the funds deposited in the bank to earn interest income were from the appellant's own funds or liabilities. Depending on this crucial distinction, the outcome of the case could vary. Therefore, the Tribunal set aside the CIT(A)'s order and instructed a fresh examination of the case to ensure a fair and just decision based on a thorough assessment of the facts and legal precedents. 3. The Tribunal acknowledged the complexity of the legal issues involved, especially concerning the interpretation of Sec. 80P of the IT Act and the applicability of previous judgments to the appellant's specific circumstances. By allowing the appellant's appeal for statistical purposes, the Tribunal aimed to ensure a comprehensive review of the case to uphold the principles of fairness and justice in determining the eligibility of the appellant for the deduction under Sec. 80P. The decision underscored the importance of a detailed and reasoned approach in resolving disputes related to tax deductions for co-operative societies.
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