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2022 (2) TMI 1243 - AT - Income TaxDisallowance of claim made u/s 80P(2)(a)(i) - HELD THAT:- We agree with the submissions made by Ld. A.R, since the assessment order has been passed prior to the decision rendered by Hon’ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd (supra), [2021 (1) TMI 488 - SUPREME COURT] wherein many legal principles have been settled by Hon’ble Apex Court. Hence, the issue of deduction u/s 80P(2)(a)(i) requires to be examined afresh by following the above said decision rendered by Hon’ble Supreme Court. Accordingly, set aside the order passed by ld. CIT(A) on this issue and restore the same to the file of the A.O. with the direction to examine the claim of deduction u/s 80P(2)(a)(i) of the Act accordingly. Disallowance of claim made u/s 80P(2)(d) - A.R. submitted that the coordinate bench in the case of M/s. Vasavamba Co-operative Society Ltd [2021 (8) TMI 706 - ITAT BANGALORE] has considered the contentions of the assessee that interest earned from deposits made with Co-operative banks in compliance with the Karnataka Cooperative Societies rules constituted its income under the head “income from business” and accordingly claimed that the same is eligible for deduction u/s 80P(2)(a)(i) - HELD THAT:- As the assessee is raising this issue for the first time before the Tribunal. In the case of M/s Vasavamba Co-operative Society Ltd (supra), the division bench of Tribunal has restored this issue to the file of the AO. Accordingly, following the above said decision of the division bench, we restore this issue to the file of the A.O. for examining the claim of the assessee in accordance with law. Addition made u/s 68 - A.O. noticed that the assessee society has deposited “Specified bank notes” (demonetized notes) in the account maintained by it with CDCC Bank, Hosadurga - HELD THAT:- Assessee has complied with the requirements of sec.68 of the Act. The AO has also not stated that the assessee has not discharged the responsibility placed on it u/s 68 of the Act. Peculiarly, the AO is taking the view that the assessee was not entitled to collect the demonized notes and accordingly invoked sec.68 of the Act. I am unable to understand as to how the contraventions, if any, of the notification issued by RBI would attract the provisions of sec. 68 of the Income tax Act. In any case, I notice that the assessee has also explained as to why it has collected demonetized notes after the prescribed date of 8.11.2016. The assessee has explained that it has stopped collection after the receipt of notification dated 14.11.2016 issued by RBI, which has clearly clarified that the assessee society should not collect the demonetized notes - deposit of demonetized notes collected by the assessee from its members would not be hit by the provisions of section 68 of the Act in the facts and circumstances of the case. Accordingly, I set aside the order passed by Ld. CIT(A) on this issue and direct the A.O. to delete this disallowance.
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