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TMI Blog2015 (4) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... and non-eligible for deduction u/s. 80P and the invocation of Rule 3 by A.O to allocate the exempt profits was arbitrary and unjustified. He has also noted that A.O has not brought on record what he meant by Rule 3 and how it was applicable to the case. He has further noted that A.O has applied an unknown formula of Rule 3 which was not correct. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) and thus the grounds of Revenue are dismissed. - Decided in favour of assessee. - I.T. A. No. 3171/AHD/2011 - - - Dated:- 24-4-2015 - Shailendra Kr. Yadav (Judicial Member) And Anil Chaturvedi (Accountant M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society, engaged in both the agricultural and non-agricultural activities, Rule of 3 is applicable in sequence to provision of section 14A and the ratio of judgment of Hon'ble High Court, Rajasthan in the case of CIT Vs Rajasthan Rajya Sahakari Upbhokta Sangh Ltd. (1996) 84 TAXMAN 33 (Raj.) and also decision in the case of Kota Co-operative marketing Society Ltd. Vs CIT(1994) 76 TAXMAN 245 (Raj.) to tax the profit earned from non-agricultural activities and interest from nationalized bank. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A), Valsad ought to have upheld the order of the A.O. 4. During the course of assessment proceedings, A.O noticed that Assessee was carrying out agricultural as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Assessee. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who after considering the submissions of the Assessee deleted the addition by holding as under:- DECISION ; I have carefully gone though the submissions made before me by the Ld. A.R of the appellant and the findings of the A.O in the assessment order and the various judicial decisions as relied upon by both the parties. The appellant has two types of income i.e. income deductible u/s. 80P and not deductible. The short issue here is that the appellant determined the taxable income at Nil by claiming the deduction u/s. 80P of the Act whereas the AO determined the income of the appellant at ₹ 23,17,376/-. The activities, income there from and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw to the fact and circumstances of the case. In this case, in my view, the dispute was the chargeability of income. The AO, instead of bringing on record which specific income was not exempted, applied an unknown formula Rule 3 which not correct. In this circumstances, the AO is directed to delete the addition made of Rs. ₹ 23,17,376/- by invoking Rule 3. Accordingly, the appellant s appeal on this ground is allowed. 6. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 7. Before us, ld. D.R. supported the order of A.O. On the other hand ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted hat A.O adopted some unknown Rule of 3 and disallowed administrative an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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