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TMI Blog2022 (9) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 69A of the Act, in respect of the cash deposit made during the demonetisation period. Disallowance of deduction u/s 80P(2)(a)(i) - business of providing credit facilities to its members - HELD THAT:- There is no allegation of Revenue that assessee doesn t satisfy the condition under section 80P(2)(a)(i). Only on the basis that return of income filed by the assessee was not in conformity with Rule 12 of the Income Tax Rules, 1962 and was filed beyond time, same was treated as invalid. In this regard, it is relevant to note that in order to claim deduction under section 80P, requirement to file the return of income on or before the due date specified u/s 139(1) of the Act is relevant only from assessment year commencing on or after 1st day of April 2018, as per section 80AC of the Act. Thus prior to its substitution by Finance Act, 2018 w.e.f. 01/04/2018, impediment provided under section 80AC was only confined to section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE - after the substitution vide Finance Act, 2018, section 80AC is now also applicable to provision of Chapter VI-A under the heading C. Deductions in respect of certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in disallowing deduction u/s 80P(2)(a)(i) by disregarding the fact that the said disallowance u/s 80AC was applicable in AY 2017-18 as wrongly held by the AO. 5. In the facts of the case and in Law, the learned CIT(A) erred in confirming the addition by rejecting all the grounds of appeal without considering detailed facts submitted by the Appellant and also misinterpreting section 80AC. [B] Relief Prayed: The appellant therefore prays as follows, 1. To quash the order passed in violation of natural justice. 2. To treat the return of income as valid. 3. To delete the addition of Rs. 27,82,985/- made u/s 69A r.w.s 115BBE. 4. To delete the disallowance of deduction claimed u/s 80P(2)(a)(i) of the Act. [C] General The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. This appeal is filed on time and the same may please be allowed in full. A Detailed paper book along with case laws will be submitted at the time of hearing. 3. The grievance of the assessee, in the present appeal, is against disallowance of deduction under section 80P(2)(a)(i) of the Act and addition of Rs. 27,82,985 to the total income of the assessee. 4. The brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) vide impugned order dated 29/07/2021 dismissed the appeal filed by the assessee, by observing as under: 7.1 in the absence of details being filed regarding the cash deposits, the AO has added the entire cash deposits during the demonetization period u/s 69A rws 115BBE after due verification from the assessee's bank and based upon the details provided by the bank. 7.2 The business income estimated at 10% of cash deposits received of Rs. 97,59,856/- [excluding those during demonetization period] is reasonable for the line of business and in the absence of complete details of depositors being filed. The list furnished by the appellant is incomplete in many respects including not containing PAN of the depositors. 7.3 As regards, the assessee's claim that 80P(2) deduction should have been allowed on these deposits, the same could not be allowed by the AO in the absence of a valid return. The return of income for AY 2017-18 filed by the appellant on 22/02/2018 was beyond time and therefore invalid. Being aggrieved, the assessee is in appeal before us. 5. During the course of hearing, learned Authorised Representative (‗learned AR ) submitted that cash deposited by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained with Mumbai District Central Co-operative Bank, Borivili (West), Mumbai branch, forming part of the paper book from page No.197 219. Thus, as per the assessee cash amounting to Rs. 17,90,500, was only deposited in its bank account during the demonetisation period. We find that the above submission is duly corroborated from the entries in the aforesaid statement of accounts forming part of the paper book. Thus, we are of the considered view that Assessing Officer has erred in considering the amount of Rs. 18,07,000 instead of Rs. 17,90,500, deposited during the demonetisation period. Further, the Assessing Officer has added the amount deposited during the demonetisation period under section 69A of the Act. In this regard, it is pertinent to analyse the provisions of section 69A of the Act, which reads as under: 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under section 69A of the Act, in respect of the cash deposit made during the demonetisation period. 10. As regards the addition by treating net trade margin of 10% of total credit of Rs. 97,59,856 to be the net profit and therefore taxing the same as business income of the assessee, we find that the assessee in its return of income has claimed deduction under section 80P(2)(a)(i) of the Act being in the business of providing credit facilities to its members. There is no allegation of Revenue that assessee doesn t satisfy the condition under section 80P(2)(a)(i) of the Act. Only on the basis that return of income filed by the assessee was not in conformity with Rule 12 of the Income Tax Rules, 1962 and was filed beyond time, same was treated as invalid. In this regard, it is relevant to note that in order to claim deduction under section 80P, requirement to file the return of income on or before the due date specified under section 139(1) of the Act is relevant only from assessment year commencing on or after 1st day of April 2018, as per section 80AC of the Act. Provisions of section 80AC of the Act, reads as under: 80AC. Where in computing the total income of an assessee of an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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