9911796707
TMI Blog2024 (6) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... t/income in that year even though legally such receipt/income is not taxable as per law . This view finds fortified in the decision of Bharat General Reinsurance Co. Ltd. [ 1970 (12) TMI 5 - DELHI HIGH COURT] The amount received by the appellant from its member was admittedly towards contribution to common pool of the society and since is governed by the doctrine of mutuality hence is inexigible to tax. The incorrect reporting of such contribution while filing the return would per-se does not change the character nature of such receipt, therefore such incorrect reporting would in no case sanction the tax authorities to bring it under the tax net. Thus the addition made on this score stands deleted as contra-legem. Allowability of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in conformity with legal position and binding judicial precedents, hence vacated. Resultantly, we reverse the denial of deduction. Assessee appeal allowed. - Hon ble S. S. Godara, Judicial Member And Shri G. D. Padmahshali, Accountant Member For the Assessee : None For the Revenue : Mr Ramnath Murkunde ORDER PER G. D. PADMAHSHALI, AM; By this appeal the assessee impugned DIN Order No. ITBA/NFAC/S/250/2022-23/1047089679(1) dt. 07/11/2022 passed u/s 250 of Income-tax Act, 1961 [ the Act hereafter] by National Faceless Appeal Centre, Delhi [ NFAC hereafter] arising out of order of intimation passed u/s 143(1) of the Act for assessment year 2018-19 [ AY hereinafter]. 2. The case was called twice; none appeared on bequest of the assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. DR we note that, there is no dispute over the nature of receipt from members as contribution towards common pool and the amount of interest received/earned by the assessee was from its investment/deposits held with co-operative banks/institutions. 6. We also note that, the Ld. CPC/AO while processing the return has brought to tax the amount of contribution disregarding the mutuality and further denied the deduction u/s 80P(2)(d) of the Act both owning to incorrect computation and information contained in the return of income filed by the assessee. In an appeal, while confirming the determination of Ld. CPC/AO, the Ld. NFAC did also reiterate that, the appellant failed to enter the details of contribution received from the members is g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en it leaves with no grant or sanction to tax the same in the hands of recipient assessee disregarding the principle of mutuality. 9. While assessing the income of the assessee it was incumbent on the Revenue to find-out as to whether a such receipt/income the assessee claimed in its return is assessable or not. Merely because the assessee included certain receipt/income in incorrect column of its return for a particular year, it could not confer any jurisdiction on the department to tax that receipt/income in that year even though legally such receipt/income is not taxable as per law. This view finds fortified in the decision of Hon'ble Delhi High Court, in the case of CIT Vs Bharat General Reinsurance Co. Ltd. [1971, 81 ITR 303 (Del)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... catena of judicial precedents including CIT Vs Ahmedabad Keiser-E-Hind Mills Co. Ltd [1981, 128 ITR 486 (Guj)], Parekh Brothers Vs CIT [1984, 15 Taxman 539 (Ker)], Dattatraya Gopal Shette Vs CIT [1984, 150 ITR 460 (Bom)], Rajeev Biswas Vs UOI [2023, 459 ITR 36 (Cal)]. 14. Once it is on record that the interest income earned by the assessee is from its investment/deposit held with co-operative societies/institution, the income qualified for deduction u/s 80P(2)(d) of the Act. When the tax authorities found that the assessee made erroneous claims or error in claiming the eligible deduction which requires correction in accordance with law, then the tax authorities pursuant to binding circular and former judicial precedents were duty bound to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
