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Income Tax - Case Laws
Showing 161 to 180 of 814 Records
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2015 (9) TMI 1424 - DELHI HIGH COURT
Appeal is admitted limited to the following two questions of law framed for consideration:
(i) Whether on the facts and circumstances, the ITAT was correct in law in deleting the addition of ₹ 86,19,96,884 being the sales tax exemption claimed as capital subsidy by the assessee?
(ii) Whether on the facts and circumstances of case, the ITAT was correct in law in deleting the addition of ₹ 9,95,426 on account of disallowance of depreciation on the assets (buildings) not registered in the name of the assessee company?
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2015 (9) TMI 1423 - ITAT DELHI
Validity of assessment against non existing person - Held that:- CIT-A erred in not quashing the instant assessment framed on non existing person. CIT-A erred in not quashing the instant reopening being made in apparent violation of mandatory jurisdictional conditions stipulated under the law. CIT-A erred in not quashing the instant reopening made on basis of borrowed satisfaction, without independent application of mind and merely on information supplied by investigation wing and without any valid approval required under the law.
Invalid addition u/s 68 for share application money etc. - Held that:- CIT-A erred in sustaining addition u/s 68 & 69C on account of alleged unexplained share application money and alleged commission paid on said share application money dehors the fact that:
i. In enquiry, bank has confirmed the aforesaid transaction to Ld AO;
ii. In enquiry, share applicant u/s 133(6) has confirmed the subject transaction to Ld AD as evident from para 3.1 of AO's order;
iii. The adversarial statement never mentions assesee's name and hence not reliable for reopening and addition (lack of nexus & untested allegation);
iv. Assessee has adduced all relevant and required evidence to discharge its onus u/s 68 of the Act;
v. No visible effort is made by Ld AD to validly convert and translate stated directions of CIT-II (Central) into requisite findings;
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2015 (9) TMI 1422 - ITAT JAIPUR
Disallowance for deduction u/s 80P(2)(a)(i) - Held that:- The assessee is primarily involved giving loans to its members for the purposes of purchasing minor irrigation and agricultural equipments , rearing of the cattle's namely cows, buffalos goats and sheep. These are agricultural activities within the meaning of Act itself and further comes within the scope of agricultural and rural development activities.
Thus giving the loans for the agriculture implements seeds, and live stock clearly entitle the assessee to avail the benefit of Section 80 P of the Act. Therefore we hold that Revenue was wrong in contending that the giving loan for livestock only i.e. cow, buffalo, goat and sheep is not agricultural activities and therefore the assessee is entitled to deduction under the above said provision. In the result thereof we hereby allow the appeal with the direction to the AO to give all the benefits to the assessee under 80P of the act. - Decided in favour of assessee
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2015 (9) TMI 1421 - ITAT JODHPUR
Reopening of assessment - entitlement for credit of TCS/TDS in respect of income earned by the AOP - Held that:- In so far as the merits of case is concerned, the issue is squarely covered by the decision of CIT Vs. Bhooratnam & Company reported at [2013 (1) TMI 478 - ANDHRA PRADESH HIGH COURT ] wherein held as under: “Where income shown in the TDS certificate was offered to tax by the assessee then TDS credit is allowable on the basis of TDS mentioned in the TDS certificates irrespective of the fact that TDS certificate was not in assessee’s name.”
The facts and circumstances in the instant cases are exactly identical. Furthermore, the findings recorded by the ld. CIT(A) to the effect that the members of AOP has not claimed any TDS/TCS in their individual returns, therefore, the assessee-AOP is entitled for credit of TCS/TDS in respect of income earned by the AOP. The findings recorded by the ld. CIT(A) has not been controverted by the ld. D.R. by bringing any cogent material on record. Accordingly, we do not find any reason to interfere with the conclusion arrived at by the ld. CIT(A) in directing the AO to allow credit of TCS/TDS issued in the name of individual members in the hands of the assessee-AOP after due verification and satisfaction. Facts and circumstances being pari materia similar in all the cases of all the assessees, following the reasons given hereinabove, we dismiss all the appeals of the Revenue.
Coming to reopening issue from the plain reading of the section 147 of the IT Act, 1961, it is clear that provisions of section 147 applicable wherein any income chargeable to tax has escaped assessment not the excess credit of tax or TCS/TDS. The assessee’ case was reopened for the reason that the income of the appellant to the extent of ₹ 2668331.00 on account of excess credit of TCS/TDS allowed to the assessee AOP has escaped the assessment in terms of section 147 of the IT Act, 1961, which was not come within the purview of section 147 of the IT Act, 1961, as the excess credit of TCS/TDS is not the part of income of the assessee. Hence, the essential precondition of section 147 of the IT Act, 1961 has not been fulfilled in the assessee’s case. There is no variation in the income even after passing of order u/s 143/147 of the Act. Since there is no escapement of income which has been brought within the tax net after reopening, there is no justification for reopening of assessment. - Decided in favour of assessee.
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2015 (9) TMI 1420 - ITAT MUMBAI
Income from unexplained sources u/s. 68 - Held that:- AO had made addition to the income of the assessee u/s.68 of the Act on the basis of the report of the investigation wing of the department,that the officers of the wing had carried out a search and seizure action in the case of Mukesh Choksi group concerns who were engaged in the business of providing accommodation entries,that the was informed that the assessee was beneficiary of the entries provided by one of the Mukesh Choksi group concern i.e.GFPL,that the had claimed LTCG for four scrips,that two out of four were sold on stock exchange and remaining two were sold off market,that the FAA had given categorical finding of fact that the assessee was holding the shares for more than one year,that folio no and copies of certificates were made available to the AO,that the stamp of the company proved that shares were actually transferred in the name of the assessee,that sale of the shares and receiving the sale proceeds through banking channels is not in doubt,that Mukesh Choksi had not alleged that the transactions in question were tainted,that the assessee was not allowed cross examination of Mukesh Choksi with regard to the transactions entered in to by her.Considering the above facts, we are of the opinion that the FAA was justified in reversing the order of the AO.The information received by the AO was a good starting point for further investigation but was not a reliable evidence to make addition u/s.68 of the Act.The assessee had discharged the burden of proving the genuineness of transactions and therefore confirming the order of the FAA,we decide effective ground of appeal against the AO. - Decided in favour of assessee
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2015 (9) TMI 1419 - DELHI HIGH COURT
Treatment as a resident Indian - whether the period for which the assessee was in India involuntarily on account of his passport having been impounded is not to be counted for purposes of Section 6(1)(a) of the Income Tax Act so as to hold him entitled to be a non-resident? - Held that:- The Revenue’s appeals for AY 2007-08 and 2008-09 have already been dismissed by this Court by the judgment [2015 (5) TMI 938 - DELHI HIGH COURT ] wherein held that while executive action resulted in the passport being unjustifiably impounded, this rendered if impossible for the assessee to leave India. He virtually became an unwilling resident on Indian soil without his consent and against his will. His involuntary stay during the period that followed till the passport was restored under Court’s directive, thus, must be excluded for calculating the period under Section 6(1)(a) of Income Tax Act - Decided against revenue.
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2015 (9) TMI 1418 - ITAT AHMEDABAD
Disallowance of business loss - Revenue's basic thrust of the arguments is that since the loss is not incurred in the course of business carried on by the assessee, it should not be allowed as a deduction - CIT(A) allowed the claim - Held that:- It is an undisputed position that the assessee did in fact trade in processed agricultural produce, in connection with which advances in question were made, and it was in the course of this trading that business loss of making unrecoverable advances was incurred. The losses were thus wholly incidental to the business carried on by the assessee. There may not be any trading transactions of these products in the current year but the business of the assessee has not come to a halt. No doubt, criminal complaint filed by the assessee had not reached finality and the persons, who allegedly and fraudulently obtained these advances, were on bail given by Hon’ble High Court, the remote possibilities of recovery did not take away assessee’s right to claim reasonably foreseeable business loss. Learned CIT(A) has given categorical and detailed findings about these advances having become actually bad and these findings remain uncontroverted
As regards learned CIT(A)’s having confirmed the disallowance of business loss in respect of monies unrecoverable from Quality Foods (Rs.7,12,500) and S.N. Das Freight Forwarders Pvt. Ltd. (Rs.2,99,387), the assessee could not bring on record any material, to establish the fact of loss, before us either. Learned Counsel for the assessee has made elaborate arguments on admissibility of such losses but, in the absence of sufficient material to establish the fact of the alleged loss, we are not swayed by these arguments. We, therefore, confirm the stand of the ld. CIT(A) on this aspect as well.
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2015 (9) TMI 1417 - ITAT MUMBAI
Validity of reopening of assessment - Held that:- On a perusal of the reasons recorded, it is very much evident that the Assessing Officer only upon revisiting the Balance Sheets filed with the original return of income and revised return of income, had formed the belief that there is under assessment of income. It is patent and obvious that no new material has come to the possession of the Assessing Officer after completion of the original assessment under section 143(3) of the Act. The Balance Sheet filed along with the original return of income as well as the revised return of income were part of the record when the assessment order under section 143(3) of the Act was originally passed by the Assessing Officer. Thus, the Assessing Officer having considered these materials while completing the original assessment, initiation of proceedings under section 147 of the Act on the basis of the very same material amounts to change of opinion.
In the present case, it is apparent from the reasons recorded that there is no such material available before the Assessing Officer while he recorded his reasons for re–opening the assessment. That being the case, the re–opening of assessment on re–appreciation / review of same set of facts and material which were available at the time of completing assessment originally under section 143(3) of the Act, tantamounts to change of opinion, hence, not permissible in law. In view of the aforesaid, we hold that re–opening of assessment under section 147 of the Act in the present case is invalid - Decided in favour of assessee
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2015 (9) TMI 1416 - ITAT AHMEDABAD
Unexplained credit / deposits /investment - Held that:- The appellant had submitted the copies of assessment orders of both these persons for A.Y. 2007-08 and it is seen that the original investment amounting to ₹ 8,00,000/- had already been taxed in the hands of both these persons and therefore, the same cannot be taxed in the hands of the appellant again. Since all these accounts were in joint name, the sale proceeds were deposited in these bank accounts. As a result the appellant gets relief of ₹ 8,00,000/- in the principal amount of investment as already taxed in earlier assessment year. Since the appellant was not the owner of these mutual funds, the capital gain on maturity of mutual funds of ₹ 3,65,241/- as deposited in the impugned four bank accounts cannot be treated as income in the hands of the appellant because it was a kind of loan to the appellant. I, therefore, direct the AO to give relief of ₹ 11,65,241/- to the appellant as explained investment.
Regarding fixed deposit with GSFC, it is seen from the details that the appellant had offered only interest income in the revised return of income. However, no cogent evidences or explanation were submitted during assessment proceedings to establish the investment in GSFC fixed deposits as explained investment and therefore, the AO is justified in treating the entire maturity amount as income of the appellant In respect of sundry debtors and inter bank transfer entries, it is observed that while framing the assessment the AO has duly taken care of the same while computing the income and hence there is no need to interfere in the action of the AO. To summarize out of the total addition of ₹ 55,64,745/- on account of unexplained investment, the appellant gets relief of ₹ 30,11,991/- (Rs. 18,46,750 + ₹ 11,65,241) as discussed hereinabove and the addition of balanced amount of ₹ 25,52,754/- is sustained - Decided against revenue
Adoption of 8% of the net profit on total turnover - Held that:- We find that the Assessing Officer has applied Section 44AF but adopted 8% of the net profit on total turnover. Ld. CIT(A) has adopted profit @ 5% which in our considered view this has been rightly adopted. As the Assessing Officer has invoked the provision of Section 44AF, then Section 44AF specifies of 5% but not of 8%. The Assessing Officer should not have adopted profit @ 8%. Accordingly this ground of Revenue’s appeal is also dismissed - Decided against revenue
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2015 (9) TMI 1415 - MADRAS HIGH COURT
Demand notice for demand - stay petition - whether the Commissioner has got no power to pass any stay order ? - Held that:- The said contention is not sustainable, when the Appellate Commissioner has got power to modify or set aside or pass any order regarding the demand, that goes without saying that the said Officer without closing the matter has got ample power or incidental power to quash any order, pending disposal of the appeal.
In view of that, the impugned demand notice for demand passed by the second respondent/Assessment Officer is set aside and the first respondent/Commissioner of Income Tax is directed to pass order in the stay petition, within a period of four weeks from the date of receipt of a copy of this order.
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2015 (9) TMI 1414 - ITAT AHMEDABAD
Extension of stay of demand - Held that:- In the present case, we find that Assessee has complied with the condition of payment of disputed tax demand as directed by the Co-ordinate Bench of Tribunal. We further find that the appeal of the Assessee has not yet been disposed of and the non disposal of appeal is not attributable to the Assessee.
Considering the aforesaid facts, we are of the view that in the present case the Assessee deserves extension of stay of demand. We therefore extend the stay of impugned tax demands subject to payment of ₹ 50,000/- per month ( as stipulated in the earlier order of Tribunal) till the disposal of appeals or on the expiry of six months whichever is earlier.
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2015 (9) TMI 1413 - ITAT CHENNAI
Revision u/s 263 - validity of order passed against the dead person - Held that:- As rightly contended by the Ld. representative for the assessee, the assessee Shri M.A. Margesan was not alive either on 06.09.2013, the date on which the show cause notice was issued or on 21.03.2014, the date on which the impugned order was passed by the Commissioner. The Commissioner has not taken any steps to implead the legal representative of the assessee. It is well settled principle of law that an order passed against the dead person is nullity in law and it cannot stand. Since the assessee was no more on the date of passing of the order dated 21.03.2014, the Commissioner cannot rectify the order by including the Legal Heir at this stage. In other words, it is not a rectifiable error. Since the order was passed against the dead person, it cannot stand in the eye of law. Accordingly, the impugned order passed by the Commissioner against the deceased Shri M.A. Margesan is quashed.- Decided in favour of assessee
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2015 (9) TMI 1411 - ITAT AHMEDABAD
Deduction of Employees Contribution to PF - whether same was paid after due date and hence to be treated as income u/s.2(24)(x) r.w.s. 36(1)(va) of the Act - Held that:- Issue in dispute is suqarely covered against the assessee by the decision of Hon’ble Jurisdictional High Court rendered in the case of CIT vs. Gujarat State Road Transport Corporation reported at (2014 (1) TMI 502 - GUJARAT HIGH COURT ) wherein held that if the assessee failed to deposit the amounts representing employees’ contribution to PF & ESI accounts within the time limit prescribed under these Acts, then assessee will not be entitled for deduction. - Decided against revenue
Addition u/s.40A(2)(b) - Held that:- The payment of interest at a little higher rate to the persons even if covered u/s.40A(2)(b) cannot be termed as exorbitant when the fair market value of such interest cost is being considered. The assessee has paid interest commensurate with the interest rate prevailing in the open market. An order in case of Vipul Y. Mehta vs. ACIT [2010 (7) TMI 1051 - ITAT AHMEDABAD] has been brought to our notice, wherein Tribunal has upheld the allowance of the interest rate @ 18% per annum to the relatives on unsecured loan. Considering all these aspects, we are of the view that ld. First Appellate Authority has appreciated the controversy in right perspective. Assessee has not extended any undue benefit to the persons covered u/s.40A(2)(b) of the Income Tax Act.- Decided against revenue
Deemed dividend u/s 2(22)(e) - Held that:- First Appellate Authority has recorded a finding of fact that assessee is not the share holder of both the companies. The ld. CIT(A) has followed the decision of Special Bench of ITAT in case of ACIT vs. Bhaumik Colour Pvt. Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E ]. Hon’ble Delhi High Court has also held in case of CIT vs. Ankitech (P.) Ltd. in [2011 (5) TMI 325 - DELHI HIGH COURT ] that the assessee should be a share holder in the lender company and such holding should be more than 10% of the voting rights, only then Section 2(22)(e) would be attracted. CIT(A) correctly deleted the addition - Decided against revenue
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2015 (9) TMI 1410 - ITAT BANGALORE
Transfer pricing adjustment - RPM method V/S TNMM method as the most appropriate method - Held that:- There is no dispute that the assessee had followed RPM method for analyzing its international transactions relating to goods imported by it from its associated enterprise abroad and sold here in the local market. There is also no dispute that the assessee was importing these goods in the finished stage and selling it without making any value additions thereon. The only work rendered by the assessee was re-packing the cartons received from its supplier abroad. In other words, assessee was acting purely as a trader. Rule 10C of the Rules requires adoption of the most appropriate method which best suits the facts and circumstances of each of particular international transaction and which provide most reliable measure of an ALP in relation to the international transactions. It is an accepted position that the entire trading of the assessee did not comprise of imports from associated enterprise and selling it in local market. There were substantial local purchases as well. That RPM method is the most appropriate method when assessee is selling goods purchased from the associated enterprises as such, has been held by the Mumbai Bench in the case of M/s L’Oreal India Pvt. Ltd., (2012 (11) TMI 175 - ITAT MUMBAI).
As a necessary corollary to the above discussion, we are of the opinion, that the AO/TPO has to do a fresh analysis of international transaction involving trading of imported goods, considering RPM method as the most appropriate method. Other grounds raised by the assessee were with respect to the comparables, considered by the TPO in TNM method study, and this has become irrelevant in view of our finding that the RPM method was the best suited one. - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1409 - CALCUTTA HIGH COURT
Interpretation of Section 80 HHC - Whether Tribunal was justified in not allowing the deduction under section 80HHC in computing the mixed income derived from the tea grown and manufactured by the assessee and thereafter in proceeding under Rule 8 of the Income Tax Rules, 1962 to apportion the said income between non-agricultural income and agricultural income on 40:60 basis ? - Held that:- In view of the judgment of the Supreme Court of India in the case of Commissioner of Income Tax vs. Williamson Financial Services & Ors., reported in [2007 (12) TMI 16 - Supreme Court of India ], the question is covered against the assessee confirming the denial of assessee claim of deduction of 80HHC before the apportionment under rule 8(1)on the ground that the deduction allowable only on that part which is includible in the GT - Decided against assessee
Interpretation of the scope of Section 33AB and Ruel 8 of the Income Tax Rules, 1962 - whether the deduction under section 33AB is to be allowed while computing the income derived from sale of tea grown and manufactured by the seller which form the composite income from sale of tea grown and manufactured by the seller and the apportionment in terms of Rule 8 of the Income Tax Rules, 1962 between agricultural income and nonagricultural income should be made after the said deduction is allowed in the computation of composite income ? - Held that:- As relying on Goodricke Group Ltd. vs. Commissioner of Income Tax-II, Kolkata [2011 (5) TMI 166 - CALCUTTA HIGH COURT ] wherein held where the assessee is involved in the business of growing and manufacturing tea, on the question of deduction in terms of Section 33AB of the Act, the answer to the same depends upon the interpretation of the phrase “a sum equal to twenty per cent of the profits of such business (computed under the head “Profits and gains of business or profession” before making any deduction under this section), whichever is less - The question of application of Rule 8 does not come so long the profit or loss from the business of growing and manufacturing tea is determined after deduction of all permissible deductions under the Act - Decided in the favour of the assessee
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2015 (9) TMI 1407 - ITAT KOLKATA
Addition on account of difference in the balance of one debtor, M/s. Sen & Associates - Held that:- As rightly contended by the ld. Counsel for the assessee, when the debit balance in the account of M/s. Sen & Associates was a result of sales made to the said party by the assessee and the entire sales made to the said party were duly accounted for by the assessee in its books of accounts, the difference in the balance arisen as a result of any payment made by the said party but not accounted for by the assessee cannot be treated as income of the assessee, as the same would result in double addition. It is observed that this stand was taken by the assessee even before the ld. CIT(A), but he proceeded to sustain the addition made by the AO to the extent of ₹ 1 lakh observing that the payment made by the concerned debtor having not been accounted for by the assessee in its books of account, the same might have been spent out of books of accounts or was available with the assessee. He accordingly held that the addition to the extent of ₹ 1 lakh was liable to be made under section 69A or 69C of the Act. In my opinion, this altogether new basis adopted by the ld. CIT(A) while sustaining the impugned addition, was not supported by any evidence and the same being based on mere surmises and conjectures is not tenable. Therefore, delete the addition made by the AO on this issue and sustained by the ld. CIT(A) - Decided in favour of assessee
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2015 (9) TMI 1406 - DELHI HIGH COURT
Assessment under Section 153 A - whether no incriminating document pertaining to the assessee for this assessment year in the seized record found from the residence of the assessee - Held that:- Question that arises is answered in favour of the Assessee and against the Revenue by holding that the additions made in the assessments made pursuant to the search are unsustainable in law.
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2015 (9) TMI 1405 - ITAT MUMBAI
Transfer Pricing Adjustment relating to international transaction of provision of non binding advisory and support services - whether the MOIAPL is a good comparable and whether it passed the functional test? - Held that:- The said company MOIAPL has undertaken 23 assignments successfully in the year under consideration. Major portion of the income is earned by MOIAPL out of cross border activity services and related financial services. The capital market business is one of the source3s of the advisory fees earned by the assessee. Assessee has also earned fees out of assessee‟s capability of the structured finance teams, financial markets, ie both equity and credit market, is another source of income for the assessee
MOIAPL is into merchant banking, and therefore, is functionally different to that of the assessee which is engaged in the business of non-binding advisory services. Therefore, in our opinion, the assessee is engaged in the function of non-binding advisory services whereas MOIAPL is into the merchant banking, capital markets, finance markets etc. Therefore, we find the MOIAPL is functionally dissimilar and therefore, the same should be excluded for benchmarking the international transactions. Accordingly, AO / TPO is directed to exclude the same. - Decided in favour of the assessee.
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2015 (9) TMI 1404 - ITAT AHMEDABAD
Income from scrap sales - eligibility for section 80IB deduction - Held that:- Income arising from sale of scrap is eligible for section 80IB deduction as derived from the manufacturing activity in question. The hon’ble jurisdictional high court in Harjivandas Zaveri case (1999 (12) TMI 5 - GUJARAT High Court ) has adjudicated this very substantial question in asssesee’s favour - Decided against revenue
Sec. 80IB disallowance qua income from exchange rate difference - Held that:- We find that the hon’ble jurisdictional high court in CIT vs. Deversons Industries Ltd. [2015 (1) TMI 394 - GUJARAT HIGH COURT ] has considered hon’ble apex court decision in Liberty India vs. CIT (2009 (8) TMI 63 - SUPREME COURT) and holds that such an exchange rate gain is derived from industrial undertaking in question. The Revenue does not quote any case law to the contrary.- Decided against revenue
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2015 (9) TMI 1403 - ITAT AHMEDABAD
Entitlement to benefit of Section 80P - interest income received on fixed deposit kept with Nationalized bank, commission income and other income - Held that:- The assessee society’s main object is to give credit facilities to its members from the funds received from the members by way of collection of deposits from its members in the common fund and such common fund is deployed in the form of granting loan to the members of the society. As the co-op. credit society is engaged in the money lending business it has to maintain certain liquid funds as per various rules and regulations and also to meet the minimum requirement of the funds. As a measure of safety minimum liquid and convenience of fund movement the appellant society had to keep its surplus liquid funds with different banks including nationalized banks. Therefore, in view of above discussion and relying on the decision of Tumkur Merchants Souharda Credit Co-op. Ltd.(2015 (2) TMI 995 - KARNATAKA HIGH COURT ), the assessee is eligible for deduction under section 80P(2)(a)(i) of the Act; however, rent income at ₹ 18,600, commission income at ₹ 13,701, other income ₹ 400 and incometax refund of ₹ 13,271 totalling to ₹ 45,542/- is not eligible for deduction under section 80P(2)(a)(i) of the Act - Decided partly in favour of assessee
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