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2016 (8) TMI 1090 - GUJARAT HIGH COURT

2016 (8) TMI 1090 - GUJARAT HIGH COURT - TMI - Reopening of assessment - Deduction under section 80P(2)(d) - Held that:- Assessee's claim of deduction under section 80P(2)(d) of the Act that the Assessing Officer passed the order of assessment in which, as noted, he allowed the entire claim of deduction under section 80P of ₹ 1.51 crores which naturally included the said figure of ₹ 69.98 lacs under section 80P(2)(d) of the Act. During the assessment thus Assessing Officer had full m .....

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ould be the source of such income that the assessee had expended ₹ 11.22 croes by way of interest. Thus the Assessing Officer having examined the specific claim of deduction under section 80P(2)(d) of the Act, it would now not be open for him to reexamine the claim which would be based on mere change of opinion - SPECIAL CIVIL APPLICATION NO. 1124 of 2015 - Dated:- 24-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR .....

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titioner had declared nil income. The petitioner had however reported its claim of deduction under section 80P of the Income Tax Act of ₹ 1.51 crores(rounded off), which included interest received by the petitioner from cooperative banks and cooperative societies of ₹ 69.98 lacs which according to the petitioner was exempt under section 80P(2)(d) of the Act. The Assessing Officer however framed scrutiny assessment on such return by passing an order on 30.12.2011. In such order, he di .....

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eclaring nil income. The assessment was completed u/s.143(3) and income was determined at ₹ 4,62,94,340 vide order dated 30.12.2011. 2. On examination, it is noticed that assessee has claimed deduction u/s.80P(2)(d) of ₹ 69,98,348/- . It is further noticed that the during the year under consideration, the assessee received total interest of ₹ 2,58,93,000/- out of which an amount of ₹ 69,98,348/- was interest received from Cooperative banks & Cooperative Societies. It .....

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the assessee for A.Y. 2011-12. Therefore, deduction claimed by the assessee u/s.80P(2)(d) amounting to ₹ 69,98,348/- is required to be disallowed. 3. In view of the above facts & circumstances, I have reason to believe that the income of ₹ 69,98,348/- has escaped the assessment within the meaning of sec.147 of the income tax act, 1961 for the assessment year 2009-10. Therefore, issue notice u/s. 148 of the act for A.Y.2009-10 to the assessee. 4. After unsuccessful attempt in per .....

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is Court in case of The Surat Vankar Sahakari Sangh Ltd v. Asst. Commissioner of Income Tax, Circle5, judgement dated 12.7.2016 passed in Tax Appeal No.93/2008 and connected appeals. In such judgement, the Court held that deduction under section 80P(2)(d) of the Act would be available on the whole of the interest income and would not be adjusted against the interest expenditure which is not related to earning of such interest income. 5. Revenue however, supports the notice on the ground that the .....

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nd on which the notice for reopening has been passed is that the assessee, a cooperative society, had claimed deduction of ₹ 69.98 lacs under section 80P(2)(d) of the Act. As against this, the society had paid interest of ₹ 11.22 crores on loan. According to the Assessing Officer, interest income had to be adjusted against interest expenditure before residue, if any, could be claimed by way of deduction. 7. During the original assessment, the Assessing Officer had raised multiple que .....

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nterest paid/payable is enclosed herewith as per Annexure-D Deduction u/s. 80P(2)(d): Interest income of ₹ 69,98,348/- has been claimed as deduction u/s.8OP(2)(d) on the basis of the chart showing interest income earned. You will please find from the chart that the interest has been earned out of the investment of amount received on sale of milk, milk products etc. from GCMM F Ltd. Similarly, the dividend of ₹ 77,2l,996/- has been claimed as deduction u/s.80P(2)(d) of the IT. Act as .....

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We submits that no expenditure whatsoever in the form of interest has been incurred by us for earning such dividend and interest from Co-Op-Societies. We submit that expenditure of interest has no nexus whatsoever with the income of the interest and dividend during the year. Relied on : a) in the case of Banas Dist.Co-Op-Milk Produces Union Ltd. Hon'ble Appellate Tribunal has dismissed the appeal filed by the department in A.Y.s1990-91, 1991-92, 1992-93, 1993-94. b) Hon ble Appellate Tribuna .....

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