2023 (4) TMI 1000 - AT - Income Tax

Income Tax Appeals Allowed for Deduction Claimed Under Section 80P: Tribunal Decision

Guru Datatrey Sarafi Sahkari Mandli Ltd., Kodvav Vividh KaryaSahkari Mandali Ltd., Jetpur Kheti VVKS Mandli Ltd. Versus Pr. CIT-1 Rajkot

The Tribunal allowed all three appeals by different Assessees regarding assessment under section 143(3) of the Income Tax Act, 1961 for the Assessment ... Revision u/s 263 by CIT - deduction u/s 80P on the FDs made - Diversified views - As per the PCIT the impugned interest income was not arising from the activity of financing from the members and as assessee is not eligible for deduction for such interest income under the provisions of section 80P but the AO has allowed the same without the necessary verification and application of mind - HELD THAT:- We note that this tribunal in the case of Shree Keshav Co-operative Credit Society Limited [2022 (7) TMI 79 - ITAT RAJKOT] as held that AO has taken one of the possible view for allowing the deduction to the assessee under the provisions of section 80P(2)(d)/80P(2)(a)(i)(a) of the Act. Where two view are possible on the issue and the AO has taken one of the possible view, but the PCIT do not agree with the view adopted by the AO, in such scenario, the order of the AO cannot be held erroneous. Decided in favour of assessee. Issues involved:The judgment involves appeals by different Assessees against orders of the Principal Commissioner of Income Tax regarding assessment under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2017-18.Issue 1: Assessment under section 263 of the ActThe primary issue raised is that the Principal CIT erred in holding the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial to the interest of Revenue. The dispute arises from the deduction claimed under section 80P of the Act on interest income from cooperative banks.The Principal CIT contended that the interest income claimed by the Assessee did not qualify for deduction under section 80P as it was not arising from financing activities with members. The AO had allowed the deduction without proper verification, leading to the initiation of proceedings under section 263 of the Act. The Tribunal considered the precedent set by the Gujarat High Court and held that when two views are possible and the AO has taken one view, the order cannot be considered erroneous unless the view is unsustainable in law. As the AO's decision was found to be reasonable and supported by judicial precedent, the Tribunal quashed the revisional order of the Principal CIT.Issue 2: Appeal of one Assessee - ITA No. 138/Rjt/2022The appeal by this Assessee raised an identical issue to that of another Assessee in a separate case. The findings and decision made in the other case were deemed applicable to this appeal as well. The Tribunal had already ruled in favor of the Assessee in the similar case, and both the Assessee and the Department agreed to apply the same decision to this appeal. Consequently, the ground of appeal filed by the Assessee was allowed.Issue 3: Appeal of another Assessee - ITA No. 148/Rjt/2022Similar to the previous appeal, the issue raised by this Assessee was identical to that of the Assessee in a different case where the Tribunal had already decided in favor of the Assessee. The findings in the previous case were applied to this appeal, resulting in the allowance of the ground of appeal filed by the Assessee.In conclusion, all three appeals by different Assessees were allowed based on the respective issues and findings discussed in the judgment.