TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 1133
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....ivities that are agricultural and non-agricultural, providing credit facilities, rental income etc. Assessee filed its return of income for A.Y. 2007-08 on 22.10.2007 declaring total income at Rs. Nil after claiming deduction of Rs. 56,98,026/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 10.12.2009 and the total income was determined at Rs. 23,17,376/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 12.09.2011allowed the appeal of the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds;- 1. On the facts and in the circumstances of ....
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.... carried on by Assessee, the profits earned from some of the activities were exempt and some of them were not exempt u/s. 80P of the Act but according to the A.O., Assessee has claimed deduction u/s. 80P on the entire profits. He was of the view that the interest earned by the Assessee from nationalized bank and other activities were not exempt u/s. 80P (2) and therefore the Assessee was issued a show cause notice and asked to justify its claim to which Assessee interalia submitted that it has claimed deduction under 80P of the Act on the income only on the income which is exempt u/s. 80P. The submission of the Assessee was not found acceptable to the A.O in view of the fact that Assessee was keeping mix accounting records for all the activ....
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....n item-was not supported by deduction u/s. 80P. In my view, the action of the AO was not supported by valid reasons and corroborated by evidences brought out in records. The appellant has maintained separate sets of books of a/c. for income eligible/non-eligible for deduction u/s.80P. The Id. AR relied upon several judicial decisions in support of his arguments. The invocation of Rule 3 by the AO was arbitrary and unjustified, What is the objectives of the Co- Operative Society is important here. The Society was primarily for the benefits of its Members. With regards the interest income from SBI and IDBI Banks, the appellant has clearly stated that such income accumulation was out of multiple activities done with the Banks. I have also peru....
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....he material on record. In the present case Assessee was undertaking various activities and out of the various activities, profit from some activities were exempt and from some other activities the profit was not exempt u/s 80P and accordingly A.O has re-worked out the amount eligible for deduction u/s. 80P. We find that ld. CIT(A) while deciding the issue in favour of the Assessee has given a finding that Assessee has maintained separate set of books of accounts for income eligible and non-eligible for deduction u/s. 80P and the invocation of Rule 3 by A.O to allocate the exempt profits was arbitrary and unjustified. He has also noted that A.O has not brought on record what he meant by Rule 3 and how it was applicable to the case. He has fu....