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2024 (2) TMI 1168 - AT - Income TaxIssues Involved: The judgment involves the assessment orders passed under Section 263 of the Income Tax Act, 1961 for the Assessment Year 2018-19. The main issue raised is the correctness of the assessment order passed by the Ld. Principal Commissioner of Income Tax-1, Rajkot regarding the eligibility of deduction u/s 80P(2)(d) of the Act on interest income. Issue 1 - Eligibility of Deduction u/s 80P(2)(d) on Interest Income: The Ld. PCIT held that the interest income earned on Fixed Deposit Receipts (FDRs) with a Co-op. Bank was not eligible for deduction u/s 80P(2)(d) of the Act. The Ld. PCIT set aside the assessment order and directed the Assessing Officer to pass a fresh order denying the deduction on the interest income of Rs. 25,419. The assessee contended that the interest received was penal interest from delayed payments by members, eligible for deduction u/s 80(P)(2)(a)(i) of the Act. The Tribunal found that the interest was not received from the Co-op Bank but from members, concluding that the Ld. PCIT's decision was based on wrong assumptions of facts. The Tribunal quashed the order under section 263 of the Act, allowing the appeal of the assessee. Issue 2 - Consistency in Decision for Similar Cases: The judgment also addressed another appeal by a different assessee for the same Assessment Year 2018-19. The issue raised in this case was identical to the first case. The Tribunal decided that the findings in the first case applied to the second case as well. The appeal of the second assessee was allowed based on the decision made in the first case, ensuring consistency in the application of the law to similar cases. Conclusion: In conclusion, the Tribunal allowed both appeals filed by different assessees, emphasizing the importance of correct interpretation and application of tax laws to ensure fair treatment and consistency in similar cases. The judgment highlighted the need for thorough examination of facts and adherence to legal provisions to prevent erroneous decisions that could be prejudicial to the interests of the revenue.
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