2024 (1) TMI 949 - AT - Income Tax

Deduction u/s 80P - Assessee-Society had derived interest income derived from Nationalized Banks - HELD THAT - We note that as per the provisions of section 80-P(2)(d) of the Act, the interest income earned out of investments/deposits with Co-Op. societies are only eligible for deduction. The interest income earned from other than Co-Op. Societies are not eligible for deduction under section 80-P(2)(d) of the Act. We note that assessee-society has not claimed the deduction under section 80-P(2)(d) of the Act, in respect of the above sum of Rs. 1,25,31,686/-, rather the assessee has shown the above Rs. 1,25,31,686/-, under the head income from other sources and paid the taxes thereon, hence the question of disallowance does not arise. Based on these facts and circumstances, we delete the addition - Decided in favour of assessee.

Summary

Issues involved:
The appeal pertains to the assessment year 2014-15 and challenges the order passed by the National Faceless Appeal Centre, Delhi, arising from an assessment order u/s 143(3) of the Income Tax Act, 1961.

Issue 1 - Denial of deductions under Chapter VIA of the Act:
The appellant contested the denial of deductions claimed under Chapter VIA of the Act by the Deputy CIT u/s 143(3) of the Act, alleging misinterpretation and misconstruction of the law. The appellant argued that the denial was based on non-submission of detailed breakup for the claimed deduction u/s 80P(2)(d) of the Act, pertaining to income earned from investments with cooperative societies.

Issue 2 - Invocation of Section 80P(4) of the Act:
The appellant contended that the Assessing Officer's invocation of Section 80P(4) of the Act to deny deductions under Chapter VIA of the Act was erroneous. The appellant emphasized the nature of income earned from investments with cooperative societies and challenged the assessment order as misconceived and without jurisdiction.

Issue 3 - Denial of deduction u/s 80P(2)(d) based on judicial pronouncements:
The appellant argued that the denial of deduction u/s 80P(2)(d) of the Act, based on misinterpretation and misapplication of judicial pronouncements, was arbitrary and against the settled law. The appellant highlighted inconsistencies in the AO's approach and emphasized the need for adherence to the rule of consistency in tax assessments.

Summary of Judgment:
The ITAT Surat allowed the appeal filed by the assessee for the assessment year 2014-15. The Tribunal noted that the Assessing Officer had made an addition assuming that the assessee had claimed deduction u/s 80P(2)(d) of the Act for interest income derived from nationalized banks. However, the Tribunal clarified that deductions under section 80-P(2)(d) are eligible only for interest income earned from investments with cooperative societies, not from other entities. As the appellant had not claimed such deductions for the interest income from nationalized banks, the addition was deemed unwarranted, leading to the deletion of the said amount.