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2021 (9) TMI 924 - AT - Income TaxDeduction u/s 80P(2)(a) - income is attributable to the dealing with regular members and nominal members - HELD THAT - The Division Bench of the Tribunal in the case of M/s.Ravindra Multipurpose Co-operative Society Limited 2021 (9) TMI 342 - ITAT BANGALORE had remanded the identical issue to the files of the A.O. for de novo consideration - As restore the issue of claim of deduction u/s 80P of the I.T.Act to the files of the A.O. for de novo consideration. Deduction u/s 80P(2)(d) - assessee has violated the principle of mutuality - If the assessee receives interest / dividend income out of investments earned with co-operative society, the same is entitled to deduction u/s 80P(2)(d) of the I.T.Act. With these observations, we direct the A.O. to examine the claim of deduction u/s 80P(2)(d) of the I.T.Act, afresh.
Issues:
1. Disallowance of deduction u/s 80P(2)(a)(i) of the Income Tax Act. 2. Disallowance of interest income on investments as deduction u/s 80P(2)(d) of the Act. 3. Disallowance of provision for audit fee and retirement benefit fund. 4. Additional ground regarding deduction u/s 80P(2)(a) of the Act. Issue 1: Disallowance of deduction u/s 80P(2)(a)(i) of the Income Tax Act: The assessee, a co-operative society, filed an appeal against the CIT(A)'s order denying the deduction u/s 80P(2)(a)(i) of the Act. The CIT(A) upheld the denial, citing violations of the principle of mutuality and the presence of more than 15% nominal and associate members. The Tribunal referred to a similar case and remanded the issue to the assessing officer for reconsideration in light of the Supreme Court's decision in M/s.Mavilayi Service Co-operative Bank Ltd. v. CIT. The Tribunal directed proper opportunity for the assessee to be heard. Issue 2: Disallowance of interest income on investments as deduction u/s 80P(2)(d) of the Act: The Assessing Officer denied the claim of deduction u/s 80P(2) of the Act for interest/dividend income earned from investments with co-operative banks. The Tribunal directed the AO to re-examine this claim afresh, emphasizing that if the income is derived from investments with a co-operative society, it is entitled to deduction u/s 80P(2)(d) of the Act. Issue 3: Disallowance of provision for audit fee and retirement benefit fund: The Assessing Officer confirmed the disallowance of the provision for audit fee and retirement benefit fund, considering it as a provision. The Tribunal did not provide specific details on this issue in the judgment. Issue 4: Additional ground regarding deduction u/s 80P(2)(a) of the Act: The assessee raised an additional ground seeking deduction u/s 80P(2)(a) of the Act to the extent attributable to dealings with regular and nominal members. The Tribunal admitted the additional ground, stating it is purely legal and can be decided based on the facts on record. The issue was restored to the assessing officer for fresh consideration along with the main issue of deduction u/s 80P of the Act. In conclusion, the Tribunal allowed the appeal filed by the assessee for statistical purposes, remanding various issues back to the assessing officer for reconsideration in line with the Supreme Court's decisions and providing proper opportunities for the assessee to present their case.
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