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2019 (12) TMI 453 - AT - Income TaxRectification u/s 154 - Deduction u/s 80P(2)(d) - assessment order passed u/s 143(3) - HELD THAT - The assessee challenged the rectification petition filed by the assessee by filing appeal before CIT(A). With regard to the first mistake stated as item (a) in the preceding paragraph, the first appellate authority directed the AO to rectify the mistake regarding the quantum of addition made in the computation of statement. With regard to the second mistake stated as item (b) in the preceding paragraph, the Ld CIT(A) held that the same is debatable in nature and hence the same would fall outside purview of sec.154 of the Act. Accordingly, the Ld CIT(A) allowed the appeal of the assessee in part. The assessee is aggrieved by the decision rendered by Ld CIT(A) on the second issue. It is pertinent to note that the assessee did not prefer separate appeal against the original assessment order passed u/s 143(3) - A.R appearing before me submitted that the grounds of appeal raised before Ld CIT(A) were related to both the orders passed u/s 143(3) as well as u/s 154 of the Act. As noticed earlier, the Ld CIT(A) has considered only the order passed by the AO u/s 154 of the Act. Accordingly he has directed the AO to rectify the mistake with regard to the quantum of addition. With regard to the claim for deduction u/s 80P(2)(d) of the Act, the Ld CIT(A) has held that the said claim is debatable in nature. There is no infirmity in the order passed by Ld CIT(A), as the second issue is debatable in nature and hence the same would fall outside the purview of sec.154 of the Act. Accordingly, I confirm the order passed by Ld CIT(A) - Appeal of the assessee is dismissed.
Issues:
1. Deduction claimed under section 80P(2)(d) of the Act 2. Rectification petition filed under section 154 of the Act 3. Appeal challenging the decision of Ld CIT(A) Analysis: 1. Deduction claimed under section 80P(2)(d) of the Act: - The assessee, a co-operative society, appealed against the order of Ld CIT(A) challenging the denial of eligible deduction under section 80P(2)(d) of the Act for interest income earned from deposits in co-operative banks. - The AO restricted the deduction to the Gross total income of &8377; 21,99,628/-, despite the assessee claiming &8377; 49,28,237/-. - The AO relied on court decisions to disallow the deduction, resulting in a total income determination at &8377; 43,99,256/-. - The assessee filed a rectification petition under section 154, pointing out the excess assessment and the nature of interest income as deductible under section 80P(2)(d). - The AO rejected the rectification petition, leading to an appeal before Ld CIT(A). - Ld CIT(A) partially allowed the appeal, directing rectification of the quantum of addition but deeming the deduction claim debatable. The assessee contested this decision. 2. Rectification petition filed under section 154 of the Act: - The AO incorrectly added &8377; 45,14,399/- instead of the stated &8377; 21,99,628/-, resulting in excess assessment. - The assessee argued that interest income from deposits should be deductible under section 80P(2)(d), citing relevant case law. - Ld CIT(A) directed rectification of the quantum of addition but deemed the deduction claim debatable, leading to the assessee's dissatisfaction with this decision. 3. Appeal challenging the decision of Ld CIT(A): - The assessee did not separately appeal the original assessment under section 143(3) but raised issues related to both that order and the one under section 154 before Ld CIT(A. - Ld CIT(A) only considered the section 154 order, directing rectification of the quantum of addition and deeming the deduction claim debatable. - The appeal was dismissed by the ITAT, affirming Ld CIT(A)'s decision based on the debatable nature of the deduction claim under section 80P(2)(d) of the Act. This comprehensive analysis outlines the legal battle surrounding the deduction claim, rectification petition, and appeal, emphasizing the intricacies of the tax laws and court decisions that influenced the final judgment.
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