https://www.taxtmi.com/caselaws?id=775051 The ITAT Chandigarh addressed deductions under sections 80P(2)(e) and 80P(2)(d) regarding rental income from godowns and dividend income respectively. The AO had invoked section 14A, making notional disallowances that effectively nullified the cooperative society's exemption claims. The tribunal held that section 80P(2)(e) deduction is available only for passive letting of godowns to third parties for storage, processing, or marketing of others' commodities. If godowns are used for the assessee's own trading operations, such income doesn't qualify for exemption. The AO was directed to conduct factual verification based on lease deeds, rental agreements, and supporting documents to distinguish between passive rental income and trading-related income. Regarding dividend income under section 80P(2)(d), the tribunal found the assessee had voluntarily disallowed Rs. 42,56,730 under section 14A. The AO's additional disallowance under Rule 8D without considering this voluntary disallowance resulted in impermissible double disallowance. The matter was remanded to the AO with specific directions to verify the nature of godown usage, avoid duplication in disallowances, and provide adequate hearing opportunity. en-us Wed, 16 Jul 2025 00:00:00 +0530 Fri, 18 Jul 2025 08:22:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=775051 The ITAT Chandigarh addressed deductions under sections 80P(2)(e) and 80P(2)(d) regarding rental income from godowns and dividend income respectively. The AO had invoked section 14A, making notional disallowances that effectively nullified the cooperative society's exemption claims. The tribunal held that section 80P(2)(e) deduction is available only for passive letting of godowns to third parties for storage, processing, or marketing of others' commodities. If godowns are used for the assessee's own trading operations, such income doesn't qualify for exemption. The AO was directed to conduct factual verification based on lease deeds, rental agreements, and supporting documents to distinguish between passive rental income and trading-related income. Regarding dividend income under section 80P(2)(d), the tribunal found the assessee had voluntarily disallowed Rs. 42,56,730 under section 14A. The AO's additional disallowance under Rule 8D without considering this voluntary disallowance resulted in impermissible double disallowance. The matter was remanded to the AO with specific directions to verify the nature of godown usage, avoid duplication in disallowances, and provide adequate hearing opportunity. Case-Laws Income Tax Wed, 16 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=775051