Tribunal remits income eligibility issue under section 80P(2)(a)(iii) for quantification

The Tribunal set aside the CIT(A) order regarding the eligibility of income for deduction under section 80P(2)(a)(iii) of the Income-tax Act, 1961, and remitted the issue to the AO for quantification after noting the lack of separate books for each activity. The AO was directed to determine the eligible income for deduction under the specified section. The Tribunal ensured proper opportunity for the assessee to be heard and partly allowed the appeals for statistical purposes.

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Issues:
Appeal against CIT(Appeals) orders for assessment years, grounds raised by the assessee, contention regarding deduction under section 80P(2)(a)(iii) of the Income-tax Act, 1961, activities of the assessee, eligibility of income for deduction, lack of separate books for each activity, remittance of the issue to the AO for quantification, decision to set aside CIT(Appeals) order, partial allowance of appeals.

Analysis:
The judgment deals with appeals against CIT(Appeals) orders for various assessment years. The assessee raised common grounds challenging the maintainability of the CIT(A) orders and seeking full allowance of the appeals. The main contention was regarding the eligibility of income for deduction under section 80P(2)(a)(iii) of the Income-tax Act, 1961. The assessee argued that the commission earned from marketing agricultural produce should be considered eligible for deduction. However, both the AO and the CIT(A) treated this income as not eligible for deduction under the said section.

The assessee's representative pressed common ground No.7 during the hearing, focusing on the treatment of commission income. The argument was that the income from marketing agricultural produce qualifies as an eligible business for deduction under section 80P(2)(a)(iii) of the Act. On the other hand, the Departmental Representative contended that certain activities of the assessee, such as purchasing from traders, do not qualify for the deduction under the mentioned section. The CIT(A) had restricted the deduction to income from eligible business activities only.

The Tribunal observed that the assessee did not maintain separate books for each activity, making it challenging to determine the exact amount eligible for deduction. Considering the lack of clarity, the Tribunal decided to remit the issue back to the AO for quantification of the deduction under section 80P(2)(a)(iii) after examining the books of account. The AO was directed to verify the correctness of the accounts to determine the eligible income for deduction under the specified section.

Consequently, the Tribunal set aside the CIT(A) order on this issue and remitted it to the AO for a fresh decision in accordance with the law, ensuring proper opportunity for the assessee to be heard. The appeals by the assessee were partly allowed for statistical purposes. The judgment was pronounced in an open court on September 28, 2021.

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