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2022 (3) TMI 123 - AT - Income TaxDeduction u/s 80P - assessee is a Primary Agricultural Co-operative Society duly registered under the Karnataka Co-operative Societies Act,1959 established with the main object of providing credit facilities to its members by collecting funds from its members, marketing agricultural produce and agricultural implements, sale of fertilizers / pesticides etc. and purchase & sale of domestic requisites and grocery etc.- AO denied entire deduction of Section 80P to the assessee thereby making an addition merely because of the fact that the assessee had admitted Nominal Members - HELD THAT:- The Hon'ble Supreme Court has settled many issues in the decision rendered by it in the case of Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT]and since the facts prevailing in the instant case needs to be examined afresh in the light of the principles enunciated by Hon'ble Supreme Court in the above said case, we are of the view that the issue of deduction u/s 80P(2)(a)(i) of the Act requires fresh examination at the end of the A.O. We set aside the order passed by Ld. CIT(A) for the year under consideration and restore them to the file of the A.O. for examining it afresh based on the principles laid down by Hon’ble Supreme Court in case of Mavilayi Service Co-operative Bank Ltd. (supra). Eligibility of the assessee to claim deduction u/s 80P(2)(d) - As relying on KARKALA CO-OP S. BANK LTD. VERSUS ITO WARD-3 UDUPI [2021 (2) TMI 854 - ITAT BANGALORE] we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to allow deduction of proportionate cost, administrative and other expenses, if the A.O. proposes to assess the interest income earned from bank deposits as income under the head -other sources.
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