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2021 (2) TMI 854 - AT - Income TaxDeduction under 80P(2)(a)(i) - assessee is a cooperative society providing credit facilities to its members - HELD THAT:- Since 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. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue in both the years under consideration and restore them to the file of the A.O. in both the years for examining it afresh as discussed above. Deduction claimed u/s 80P(2)(d) in respect of interest income earned from fixed deposits kept with bank - AO assessed the interest income received on bank deposits under the head “Income from other sources” and denied deduction claimed u/s 80P(2)(d) - HELD THAT:- Tribunal was not right in coming to the conclusion that the interest earned by the appellant is an income from other sources without allowing deduction in respect of proportionate cost, administrative expenses incurred in respect of such deposits. Accordingly, the Ld. A.R. prayed that the A.O. may be directed 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”. We find merit in the prayer of the assessee, since it is supported by the decision rendered by Hon’ble High Court of Karnataka in the case of Totgars Co-operative Sale Society Ltd. Vs. ITO [2015 (4) TMI 829 - KARNATAKA HIGH COURT]. Accordingly, we direct the A.O. 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”. Disallowance of provision for bad debts and provision for centenary fund - Admission of additional evidence - HELD THAT:- We notice that the A.O. had made the above said disallowances in assessment year 2015-16, but the assessee had omitted to challenge the above said additions before Ld. CIT(A). Hence the assessee has raised the above said issues before us by way of additional grounds. We are of the view that both the above said issues require fresh consideration at the end of the A.O., since the main issues have been restored to the file of the A.O. and the decision taken on them may have impact on the above said two additions. Accordingly, we restore both the above said issues to the file of the A.O. for examining them afresh.
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