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2019 (1) TMI 1708 - AT - Income TaxRevision u/s 263 - A.O had erroneously allowed the assesses claim for deduction u/s 80P(2)(d) on the interest income that was earned from the investments made with the co-operative bank - HELD THAT:- Though the co-operative bank pursuant to the insertion of sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, however, as a co-operative bank continues to be a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. Interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Be that as it may, in our considered view as the A.O while framing the assessment under Sec. 143(3), dated 23.12.2017, had arrived at a plausible as regards the assesses entitlement under Sec. 80P(2)(d) on the interest income earned on its investments held with the co-operative banks, which view we find at the point of framing of the assessment was in conformity with that arrived at by the jurisdictional Tribunal in a host of judicial pronouncements, therefore, the said fact in itself would suffice to divest the Pr.CIT of his revisional jurisdiction under Sec. 263 in respect of the aforesaid issue. A.O had erroneously worked out the tax liability of the assessee under the normal provisions as against the alternate minimum tax (ALT) - As specifically provided in clause (i) of sub-section (2) to Sec. 115JC, the ‘total income’ of the assessee is not to be increased by the deduction claimed under Sec. 80P. On a perusal of the calculation of the ‘adjusted total income’ as per ITNS, we find, that the A.O had worked out the same by increasing the total income of the assessee by the amount of deduction that was claimed by the assessee under Sec.80P of the Act. As such, on the basis of his aforesaid working, the A.O had erroneously calculated the ‘adjusted total income’ at ₹ 1,13,55,916/- as against the correct amount of ₹ 57,39,674/-. In the backdrop of the aforesaid facts, we find substantial force in the claim of the Ld. A.R that the observation of the Pr.CIT that the tax liability of the assessee as per AMT was higher than that worked out on its ‘normal income’, is based on incorrect working of the A.O in the ITNS. In sum and substance, a correct working of the AMT on the ‘adjusted total income’ of ₹ 57,39,674/- is clearly found to be lower than the tax liability of the assessee under the ‘normal provisions’. On the basis of the aforesaid facts, we are of a strong conviction that as the calculation of the tax liability by the A.O under the ‘normal provisions’ at ₹ 19,47,515/- [₹ 57,39,670/- (normal income) x 30% (+) Surcharge and E.cess] is higher than the correct amount of AMT viz. [₹ 57,39,674/- (adjusted total income) x 18.5%], therefore, the calculation of the tax liability by the A.O as per the ‘normal provisions’ at ₹ 19,47,515/- cannot be held to be prejudicial to the interest of the revenue. Accordingly, on the basis of our aforesaid deliberations, we are of the considered view that the Pr.CIT is in error in concluding that the saddling of the assessee with the tax liability under the normal provisions had rendered the assessment order passed by the A.O under Sec. 143(3), dated 23.12.2017 as erroneous, insofar it was prejudicial to the interest of the revenue. We set aside the order passed by the Pr.CIT under Sec. 263 of the Act and restore the assessment framed by the A.O vide his order passed under Sec. 143(3) - Decided in favour of assessee.
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