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2015 (5) TMI 751 - AT - Income TaxDisallowance of deduction claimed u/s.80P - the assessee had violated the provisions of AP Mutually Aided Co-Operative Societies Act, 1995 - whether, having given a finding that Nominal/Associate Members are not Members of the society, the incomes from them are excluded while calculating deduction u/s.80P(2)(a)(i)? - Held that:- Assessee-society is clearly a co-operative society and Assessing Officer herself has stated that assessee is a co-operative society, but violated the provisions of the Co-operative Societies Act. There is no restriction of getting any deposits from outsiders, leave alone from nominal Members and Associate Members. As rightly pointed out by the Ld.CIT(A), the source of funds for doing the business is not a criteria. What is required to be examined by the Assessing Officer is whether the deduction u/s.80P(2)(a)(i) is from the profits and gains of providing credit facilities to its Members. To that extent the Assessing Officer can examine the assessee's transactions. Just because assessee has deposits from Non Members, it does not prevent being a co-operative society nor it prevents claiming deduction u/s.80P(2)(a)(i), if it is otherwise eligible on the said incomes. In view of this, while accepting in principle that assessee is eligible for deduction u/s.80P(2)(a)(i) and 80P(2)(d), quantification of income ie. income/profits and gains on credit facilities provided to Members, is restored to the file of Assessing Officer for necessary examination of the details of the transactions and quantifying the same. Therefore, while upholding the order of the CIT(A) on the principles of law, the quantification of deductions made by CIT(A) is therefore set aside and restored to the file of Assessing Officer to examine it afresh, in the light of the above observations/ directions. - Decided in favour of revenue for statistical purpose.
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