Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 361 - AT - Income TaxEligibility for deduction u/s.80P(2) - from the order of the CIT(A) it is clear that the assessee is eligible for deduction u/s.80P(2) and not engaged in banking business - HELD THAT:- Co-operative society which is a member of a federated co-operative society - In section 80P(2) when Parliament has used the word 'members', it has used it in the normal sense of a member of a co-operative society. The intention was to extend the exemption to co-operative societies directly extending credit facilities to their members. There is nothing in the said provision to show that the intention was to grant exemption to co-operative societies which were extending credit facilities to persons, who, though not members of the said society, were members of another co-operative society which is a member of the co- operative society seeking exemption. The meaning of the expression 'member' cannot therefore be extended to include the members of a primary co-operative society which is a member of the federated co-operative society seeking exemption. The principle of lifting the corporate veil cannot have any application in the context of the provisions contained in section 80P(2)(a)(z) of the Act - U.P. Co-operative Cane Union Federation Ltd v. CIT [1997 (1) TMI 7 - SUPREME COURT]. Assessee is eligible for deduction u/s.80P(2)(a)(i). AO has disallowed two additions i.e. provision for bad & doubtful debts and provision for gratuity - These two additions are resulting to enhancement of profit of the assessee society which are specific disallowances related to the business of the assessee. Circular issued on 02.11.2016, whereas the case of the assessee is pertaining to A.Y.2009-2010 & 2010-2011. The Circular is clarificatory in nature. Therefore, it would be presumed that the benefit of Circular will apply to the assessee. It is also clear that the additions made by the AO is covered by this Circular. The above mentioned additions are eligible for deduction under Chapter-VIA and under section 80P of the Act. In support of our above view, we also rely on the decision of the coordinate bench of the Tribunal in the case of Ozone Pharmaceutical [2019 (4) TMI 1302 - ITAT DELHI] wherein the assessee has got deduction under Chapter VIA if the profit from business has been increased by the AO by making certain disallowance. Accordingly, we allow the appeal of the assessee.
|