9911796707
TMI Blog2021 (10) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... s relevant for disposing of the appeal are stated thus: 2. The assessee is a registered Primary Agricultural Credit Society. The appeal pertains to the returns filed by the assessee/respondent for the Assessment Year 2012-13. The assessee claims deduction under Section 80P(2)(i)(a) of the Income Tax Act. The Assessing Officer held that the assessee cannot be considered as a Primary Agricultural Credit Society, and that, for the subject Assessment Year the assessee claimed expenditure to the tune of Rs. 8,99,40,357/- towards 'interest on various deposits'. The Assessing Officer, after taking note of the circumstances and books of accounts produced by the assessee, disallowed 5% of the interest paid on deposit, amounting to Rs. 44,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from its investments with any other Co-operative Society. The appellant in their return has separately shown Rs. 2,20,200/- under other sources being dividend from IFFCO. As the same represents dividends received from Indian Farmers Co-operative Society Ltd., [IFFCO] the receipt squarely comes under the eligible clause 80P(2)(d) and accordingly the appellant's claim under this clause is also allowed. Allowability of Deduction u/s 80P for the additions made: 13. The addition made of Rs. 44,97,108/- by the AO has been upheld in paras 6 and 7 of this order. However, the said addition is eligible for deduction u/s 80P. The following case laws are relevant here:- (1) Buldana Urban Co-op.Credit Society Ltd. Vs. ACIT - IT Appeal Nos.151 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laxmi Vilas Bank. According to him, even as per the judgment of the apex Court in Mavilayi Service Co-operative Bank Ltd case, the Society is entitled to claim deduction of income/interest/dividend earned from investments made in a Co-operative Society. In other words, investments with other Co-operative Society merit deduction and not income received from other sources. The interest received from Treasury Department or a scheduled Bank as Laxmi Vilas Bank, according to him, could not be deducted from the income of the assessee. 6. Advocate P Arun Raj, per contra, argues that the grounds now raised by the Revenue cannot be taken up for consideration by this Court for two reasons. Firstly, the exemption granted by the Assessing Officer in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court at this juncture without the same being subjected to challenge, as provided by law, and particularly the amount of deduction granted is Rs. 69,323/-. 8. The Commissioner of Income Tax (Appeals), as noted above, confirmed the finding of disallowing 5% of the expenditure booked towards interest paid by the assessee in the subject Assessment Year. However, included the said exclusion as deduction permissible under Section 80P(2) of the Income Tax Act. 9. The learned Senior Advocate argues that the 5% expenditure excluded does not merit a deduction under Chapter VI A of the Act. The exclusion has to be treated as an occasion falling under Section 68 of the IT Act. Further, the Circular, relied on by the Tribunal, has no application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d secondly the dis-allowance forms part of a situation contemplated by Section 68 of the Act. 12. Let us first examine the applicability of the Circular to the case on hand. Circular Dated 02.11.2016 refers to Section 32, 40(a)(ia), 40A(3), 43B, etc. The appreciation of Revenue that it is applicable only to the sections stated therein, is unacceptable and stated so without noticing the word 'etc' used in the Circular. Therefore, the objection now raised against the Tribunal that the Tribunal relied on an inapplicable Circular is incorrect and accordingly rejected. The Circular comprehensively sets out the procedure for treating such items of expenditure. 13. The assessee/Society, in view of the recent Supreme Court judgment in Mav ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
