TMI Blog2016 (3) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2009-10. The Revenue has filed cross appeal against the same order of Commissioner of Income Tax (Appeals) in ITA No. 880/PN/2014. 2. The brief facts of the case as emanating from records are: The assessee is a Co-operative Society and is engaged in the banking business. The assessee filed its return of income for the assessment year 2009-10 on 13-02-2010 declaring total income as NIL. The case of the assessee was selected for scrutiny under CASS and accordingly notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) was issued to the assessee on 18-08-2010. During the course of scrutiny assessment proceedings, the Assessing Officer observed that the assessee has earned certain incomes (listed below) on which assessee is not eligible to claim deduction u/s. 80P of the Act : Sr. No. Income Amount 1 Interest ₹ 11,85,266/- 2 Locker Rent ₹ 11,237/- 3 Ambulance Rent ₹ 1,40,230/- 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortionate of taxable net profit of gross receipts of MSEB that bearing to the gross receipts credited to Profit and Loss account for the year under appeal. 5. Without prejudice to Ground of Appeal No.1 2 and on the basis of facts and in the circumstances of the case, the Commissioner of Income Tax, (Appeals)-I, Nashik is not justified in restricting the deductions of expenses attributable to Health Club income received at 10% of gross health club income received instead of actual expenses incurred at ₹ 43,010/-. 6. On the basis of facts and in the circumstances of the case, the Commissioner of Income Tax, (Appeals)-I, Nashik is not justified in taxing the income on account of Rent of Property under the head 'Income from House Property'. 7. On the basis of facts and in the circumstances of the case, the Commissioner of Income Tax, (Appeals)-I, Nashik is not justified in withdrawing the deduction granted by the AO of ₹ 50,000/- under section 80P(2)(c)(ii). 8. The Appellant craves for addition to, deletion, alteration, modification, change any of the grounds. 4. None has appeared on behalf of the assessee. However, written submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, the appellant is entitled to deduct the expenses attributable to the running of ambulance and CIT(A) is not justified in restricting the expenses at 10 fr, of the receipt from health club activity, f. Withdrawal of deduction of ₹ 50,000/- claimed u/s. 80P(2)(c) : It is held that the assessee is entitled to deduction under section 80P(2)(c)(ii) of the Act in respect of business activities such as running of Ambulance, Health Club fee etc. which are not eligible for deduction under section 80P(2)(a) or 80P(2)(b) of the Act. A copy of the written submissions filed by the assessee was given to the ld. DR. 5. Shri Dheeraj Kumar Jain representing the Department vehemently supported the findings of Commissioner of Income Tax (Appeals) in respect of issues agitated by the assessee in appeal. However, the ld. DR fairly submitted that the issues raised in the present appeal are identical to the issues decided by the Co-ordinate Bench of the Tribunal in assessee s own case in ITA Nos. 1521 1522/PN/2015 for the assessment years 2010-11 and 2011-12 decided on 10-03-2016. As regards the appeal filed by the Department, the ld. DR contended that the issues raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from running of Ambulance, while holding that the assessee is not eligible for deduction under section 80P(2)(a) or (b), we are in total agreement with the alternate plea of the assessee that the expenses attributable for the purpose operating such activity ought to have to be allowed on actual/proportionate basis. We are of the view that the action of the CIT(A) in restricting the expenses artificially @ 10% of the gross income from such activities is not sustainable in law being devoid of objectivity. The Assessing Officer is accordingly directed to allow the expenses which are attributable to the running of Ambulance and determine the income from the aforesaid activity. The surplus if any, from this activity would be entitled to relief made residuary clause of section 80P(2)(c)(ii). We also notice that the Income from MSEB commission is held to be business activity as per decision cited by the assessee in the case of Ahmednagar District Co-operative Bank Ltd. (supra) and other decisions noted above. Accordingly, we hold that the assessee is entitled to relief under section 80P as per law. We also simultaneously find merit in the alternate plea of the assessee that proportio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 7. In the result, the appeal of the assessee is partly allowed in the foresaid terms. ITA No. 880/PN/2014 (By the Revenue) 8. The Revenue has assailed the order of Commissioner of Income Tax (Appeals) by raising following grounds in appeal: 1) Whether on the facts and in the circumstances of the case, the Ld. CIT (A)-I, Nashik was justified in allowing the deduction u/ s 80P(2)(a)(i) amounting to ₹ 11,85,266/ - in respect of interest earned on fixed deposits kept with Nationalized Bank. 2) Whether on the facts and in the circumstances of the case, the Ld. CIT (A)-I, Nashik was justified in relying on the Hon'ble ITAT, Pune 'B' Bench in the case of ITO, Ward 1(4), Nashik Vs Niphad Nagari sahakari Patsanstha Ltd. vide ITA No. 1336/PN/2011 - A.Y. 2008-09 dated 31/07/2013 even though the said decision is being contested further in the Hon. High Court. 3) Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-I, Nashik was justified in treating the claim of deduction u/s. 80P(2) in respect of Locker rent ₹ 11,237/-, Ambulance rent ₹ 1,40,230/-, MSEB commission ₹ 98,870/ - and Health club income ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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