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of <h1>Tribunal Upholds Cooperative Society's Tax Deduction, Clarifies Appealability of Modified Assessment Orders.</h1> <h3>M/s. Sri Kanyakaparameshwari Vividoddesha Sahakara Sangha Niyamita Versus ITO, Ward – 1, Shivamogga.</h3> M/s. Sri Kanyakaparameshwari Vividoddesha Sahakara Sangha Niyamita Versus ITO, Ward – 1, Shivamogga. - TMI Issues:The judgment involves issues related to deduction under section 57 of the Income Tax Act, 1961 for interest income, and the appealability of an order giving effect to the CIT(A)'s order under section 246A of the Act.Deduction under Section 57 - Cost of Funds:The assessee, a cooperative society providing credit facilities, filed an appeal against the CIT(A)'s decision to reduce the cost of funds to 15% of the interest income. The AO had calculated the cost of funds on an ad-hoc basis without proper justification. The Tribunal noted that the cost of funds is a primary cost for entities like the assessee and should be determined based on detailed workings. The assessee's claim, supported by detailed calculations amounting to 77% of the interest income, was found to be reasonable and unrefuted by the authorities. The Tribunal directed the AO to accept the assessee's calculation as the cost of funds, specifically for the amount assessed as 'Income from Other Sources'. The decision was made in favor of the assessee, allowing the appeal.Appealability of Order Giving Effect to CIT(A)'s Order:The CIT(A) had stated that the order giving effect to the CIT(A)'s order was not appealable under section 246A of the Act. However, the Tribunal disagreed, emphasizing that the AO's order modifying the earlier Assessment Order was indeed appealable under section 246A. This clarification was provided in the judgment, ensuring the correct understanding of the appealable orders under the Act.
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