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2022 (5) TMI 188 - AT - Income TaxDenying deduction u/s. 80P(2)(c) available to a cooperative society - Whether CIT(A) has erred in affirming with the Ld. AO in considering income earned by the society in normal course of business as income from other sources and denying deduction u/s 80P(2)(a)(i) - HELD THAT:- As regard ground for interest from banks the same is covered in favour of the assessee by the ITAT decision in the case of State Bank of India Employees M.S. Patel Co-operative Credit Society Ltd. [2017 (7) TMI 1417 - ITAT MUMBAI] - thus we allow the assessee’s appeal, qua interest earned. Insurance commission receipt - The society to safeguard the interest of the society has taken life insurance and mediclaim insurance policies for the members and staff, their family members and also general insurance policies for the hypothecated pledged properties, debtors and goods of the borrowers of the society. That the insurance premium paid by the society is charged and recovered from the respective members and staff. That these services are part and parcel of the business of the society. That rendering the above services insurance companies pay the society insurance commission instead of paying to the agents of the insurance company. Hence it has been pleaded that the insurance commission is part of business and hence eligible for deduction under section 80P(2)(a)(i) of the Act. Alternatively it has been pleaded that the proportionate expenses should be allowed. Commission income disallowed by learned CIT(A) on the ground that for the said income there absence of mutuality - The assessee’ submissions are not with respect to the same. They are with regard to the same being in the nature of business. Hence, there is lack of appropriate appreciation, hence in the interest of justice we remit this issue to the file of learned CIT(A). Learned CIT(A) shall consider the issue in the light of the submissions made by the assessee. Needless to add the assessee should be given adequate opportunity of being heard. As regard the ground of denial of deduction u/s. 80P(2)(c) of Rs. 50,000/- learned CIT(A) has mentioned that this was not arising out of the order of the Assessing Officer. That it is also not clear that this was claimed by the assessee in the beginning. In this regard learned CIT(A) noted that it is not forthcoming whether such a claim for deduction u/s.80P(2)(c) was made in the return of income filed. Hence, in the interest of justice I remit this issue to the file of the learned CIT(A). Learned CIT(A) shall consider the same as ground for adjudication after giving the assessee proper opportunity of being heard. Appeals of the assessee stands partly allowed for statistical purposes.
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