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2015 (7) TMI 738 - ITAT CHENNAI

2015 (7) TMI 738 - ITAT CHENNAI - TMI - Deduction u/s.80P(2)(d) - Whether CIT (Appeals) ought to have considered the fact that deduction u/s.80P(2)(d) is allowable only on net receipts after deducting the expenses from the gross receipts of interest and that the Assessing Officer has rightly disallowed the deduction u/s.80P(2)(d) on prorata basis - Held that:- The argument of the ld. Departmental Representative is misconceived. The Departmental Representative cannot raise the issue what was not .....

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me Tax (Appeals) as the decision of Commissioner of Income Tax (Appeals) was based on the orders of Co-ordinate Bench which is binding on this Tribunal. - Decided against revenue. - I.T.A.No.946/Mds/2015 - Dated:- 17-7-2015 - Shri N.R.S. Ganesan and Shri Chandra Poojari, JJ. For the Petitioner : Shri. S. Das Gupta, IRS, JCIT. For the Respondent : None ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal by Revenue is directed against the order of the Commissioner of Income-tax (Appeals), Sal .....

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engaged in banking business and trading in civil supply goods and according a report under section 44AB has been filed. The assessee in computation statement filed during the assessment proceedings has claimed an amount of ₹ 52,50,233/- has deduction u/s.80P(2)(d) of the Act. In the profit and loss account the assessee has credited ₹ 58,90,987/- under the head miscellaneous income. The assessee has claimed the following amount as deduction u/s.80P(2)(d) of the Act. Sl.No Dividend on .....

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Assessing Officer the claim of deduction of the assessee seems to be excessive. The assessee has not furnished net income eligible for deduction inspite of opportunity given. So, the Assessing Officer derived the net income worked out as under:- Total Available Funds Rs.23,95,53,103/- Total interest bearing funds Deposits from 1. Members Rs.17,54,01,016/- 2. Non Members Rs.58,00,780/- Borrowings from 1. SDCCB 2. T.N. State Govt Rs.34,920/- Total 18,12,36,716/- Proportionate of Interest bearing f .....

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nvestment with SDDCB and other co-operative societies is ₹ 52,50,233/- ₹ 39,09,644/- = ₹ 13,50,589/-. The Assessing Officer computed the qualifying amount eligible for 80P(2)(d) deduction is ₹ 13,40,589/-. Aggrieved the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). 4. On appeal, the Commissioner of Income Tax (Appeals) followed the earlier order of the Tribunal Chennai Bench in the case of M/s. SL(SPL) 151 Karkudalpatty PACCS Ltd vs. ITO in .....

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is hit by 80P(2)(a)(i) of the Act. The CIT(A) observes that as assessee s nominal / B class members are not treated as members in its audit record etc, it is not entitled for deduction. Thus, he has cancelled deduction of ₹ 3,75,420/- granted by the Assessing Officer. Therefore, the assessee is in appeal. We have heard both parties and gone through the case file. As stated in the preceding paragraphs, the CIT(A) has proceeded to enhance the assessment(supra) only on the ground that the ass .....

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2(16) that the same includes an associate member u/s 2(6) appended therein. In other words, the nominal members also enjoy statutory recognition as per the Act. The net result is that once the nominal members or non-voting members are themselves included in the definition of members , they satisfy the relevant condition imposed by the legislature u/s 80P(2)(a)(i). We make it clear that we are dealing with a deduction provision to be interpreted liberally. In our considered opinion, the objectio .....

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far as classification of the members in A or B category is concerned. We follow the same and accept contentions of the assessee . The Commissioner of Income Tax (Appeals) also placed reliance on the order of the Tribunal Chennai Bench in the case of M/s. The Salem Agricultural Producers Co-Operative Marketing Society Ltd vs. ITO, Salem in ITA Nos.730, 731 & 732/Mds/2014, dated 30.06.2014, wherein the Tribunal held that We have heard both sides, perused the materials on record and gone throug .....

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P(2)(d) of the Act. On appeal, the ld. CIT(Appeals confirmed the order passed by the ld. CIT(Appeals). We find that in the case of CIT v. Kangra Co-operative Bank Ltd. [2009] 309 ITR 106 (HP), the Hon ble Himachal Pradesh High Court has considered section 80P(2)(d) of the Act. The interest earned by the assessee co-operative bank on fixed deposits with Himachal Pradesh State Co-operative Bank in compliance with the provisions of section 57 of the Himachal Pradesh Co-operative Societies Act, 1968 .....

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