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TMI Blog2022 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. - ITA No.254/PUN/2020 - - - Dated:- 28-7-2022 - Shri S.S.Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : None For the Revenue : Shri Arvind Desai DR ORDER PER DR.DIPAK P.RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Pr.Commissioner of Income-tax-5, Pune s, order dated 08.01.2019for the Assessment Year 2014-15, involving proceedings under section 263(1) of the Income Tax Act, 1961. The Assessee has raised the following grounds of appeal: 1. Pr.Commissioner of Income Tax has erred in passing the Order which is without jurisdiction and Bad in Law. Same may please be cancelled. 2. Pr.CIT has erred in alleging that Order u/s 143(3) passed by Assessing Officer is erroneous in so far as it is prejudicial to the interest of revenue. Appellant prays to cancel the same. 3. Pr.CIT has erred in passing the Order u/s 263 and setting aside the assessment order u/s 143(3) passed by Assessing Officer with direction to complete the assessment a fresh verifying the details and allowing correct amount of deduction. Since Assessing Officer has verified the same as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts with other co-operative banks is not eligible for deduction either u/s 80P(2)(a)(i) or u/s 80P(2)(d) of the Act is justifiable. The Appeal No. 100069 of 2016 dated 05-01-2017 in the case of Karnataka High Court vs. The Totagars Co-Operative Sale Society, the Hon ble Court has decided whether for the purpose of Section 80P(2)(d) of the Act, a Co-operative Bank should be considered as a Co-operative Society or not. However, the Appeal No. 100066/2016 Connected cases dated 16-06- 2017, the Hon'ble Court has discussed the provisions of Section 80P as a whole and held that - it is the character and nature of income which determines its taxability or exemption from taxability and the income which is clearly held to be not exempt and not deductible under Section 80P(2)(a) of the Act by the Hon'ble Supreme Court in the case of respondent assessee, cannot be contrarily held as exempted and deductible merely because the depository bank, with whom the investments were made by the respondent assessee happens to be a co-operative bank. The income by way of interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and applied his mind to decide eligibility of the income for deduction u/s 80P. The Ld.Pr.CIT in the revision order has not pointed out any specific income which the AO has failed to verify. Therefore, on the facts of the case, we are of the opinion that the assessment order is not erroneous. We find support by Hon ble Bombay High Court s Decision in the case of CIT vs Chandan Magraj Parmar, 285Taxmann 565 (Bom) order dated 16/11/2021where in the Hon ble Bombay High Court held as under, Quote, When it is not disputed that the land concerned would not fall under the definition of capital asset, the question of any capital gains arising also will not arise. Moreover, we also find that the ITAT has come to a factual finding that the AO has raised queries with regard to the claim of capital gain on transfer of land, Respondent vide its reply dated 31-1-2014 furnished the details in respect of distance of agricultural land from municipal limits, record of population as per last census and the AO after considering the reply of Respondent, accepted the claim of Respondent. The ITAT has given a finding that the claim of capital gain was accepted by AO after necessary inquiry and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Incometax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in subsection (1) shall be the following', has clauses (a) to (f). Clause (d), which has been invoked by the ld. Pr. CIT reads: '(d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other cooperative society, the whole of such income.' It is axiomatic that only interest derived by a co-operative society from its investments with any other co-operative society is eligible for8 deduction under clause (d). Conversely, if the payer of the interest is not a co-operative society, its payee, a cooperative society cannot claim deduction thereon under this clause. Admittedly, the assessee received interest from a co-operative bank and not a co-operative society. A fortiori, such an amount is not eligible for deduction u/s 80P(2)(d) of the Act. 5. However, the case of the assessee before the authorities below ab initio has been that it was eligible for deduction on such interest u/s.80P(2)(a)(i) of the Act inasmuch as the assessee was engaged in providing credit facility to its members. At this juncture, it may be apposite to consider the mandate of clause (a) (i) of section 80P(2), which provides that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits and gains of business attributable to providing credit facilities to its members. 8. At this juncture, it is relevant to note that we are dealing with a case in which the ld. Pr. CIT has invoked his power u/s.263 of the Act. It is trite that the exercise of such a power is ousted in case of a debatable issue. An assessment order can be termed as erroneous and prejudicial to the interest of the Revenue if the AO has taken a view which is not legally sustainable. Per contra, if two views are available on a particular issue and the AO adopts one of such possible views, the case goes outside the purview of revisional power to be exercised by the Pr.CIT u/s.263 of the Act. 9. The Pune Benches of the Tribunal in Sureshdada Jain Nagari SahakariPatsansthaMaryadit v. Pr. CIT [IT Appeal No. 713(PUN) of 2016, dated 9-4-2019] decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit v. ITO [IT Appeal No. 604(PN) of 2014, dated 19-8-2015] has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon'ble Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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