2022 (4) TMI 380 - AT - Income Tax

Exemption u/s 80P - income of the assessee included income from letting of godown - HELD THAT - Assessee is cooperative society and it claimed NIL income after claiming exemption u/s 80P of the Act. The income of the assessee included various heads of income including transportation and rent. However, the activities in which the assessee is engaged is not coming out of the records. Clause a to f relates to various types of cooperative societies on the basis of their working and against which there is exemption of various classes of income. Therefore, we deem it appropriate to remit the matter back to AO who after verifying the nature of activities of the assessee will reexamine the claim of the assessee and will allow the same in accordance with law. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
- Deduction u/s 80P of the Income Tax Act not allowed for rent from godown and transportation of fertilizers.

Analysis:
1. The appeal was filed against the order of the ld. CIT(A) by the assessee, a cooperative society, for disallowing deductions u/s 80P of the Act for rent from godown and transportation of fertilizers. The grounds of appeal highlighted the errors made by the Assessing Officer in not allowing these deductions, which were crucial for the assessee.

2. The ld. AR representing the assessee argued that the income of the cooperative society, which included rent from godowns and transportation receipts, was exempt u/s 80P of the Act. It was contended that these incomes were not considered for the claim under section 80P by the authorities below, leading to an incorrect decision. Reference was made to Section 80P of the Act to support the argument that the assessee was eligible for exemptions under specific clauses related to the nature of income received.

3. On the contrary, the ld. DR argued that the exemption u/s 80P was classified under different heads from a to f, based on the types of cooperative societies and the classes of income they were eligible for. It was pointed out that the specific category of the activities of the society was not clear from the records, and thus, the claim under certain clauses was not justified. The request was made to set aside the matter to the Assessing Officer for further verification.

4. After hearing both parties and examining the material on record, it was observed that the assessee was indeed a cooperative society claiming NIL income after availing exemptions u/s 80P. However, the specific activities of the society were not evident from the records, making it necessary to determine the category under which the society's activities fell. The different clauses from a to f under Section 80P provided exemptions for various types of cooperative societies based on their operations. Hence, it was decided to remit the matter back to the Assessing Officer for a detailed examination of the nature of activities to ensure the correct application of the law in allowing the assessee's claim.

5. Consequently, the appeal of the assessee was allowed for statistical purposes, indicating a favorable outcome for the assessee in terms of getting the deductions under Section 80P of the Income Tax Act. The decision to remit the matter back to the Assessing Officer for proper verification and assessment of the claim ensured a fair and lawful resolution to the dispute.