TaxTMI 
TaxTMI 
2022 (8) TMI 29
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.... aside the assessment order u/s 143(3) passed by Assessing Officer with direction to complete the assessment a fresh verifying the details and allowing correct amount of deduction. Since Assessing Officer has verified the same as the case was selected under case for verifying Deductions. Assessing Officer has taken a possible view which is taken in earlier assessments and Pune ITAT that interest received from Deposits with Cooperative bank is allowable u/s 80P. Appellant Prays to cancel the Order u/s.263. 5. Appellant prays to add, alter, amend, taken additional grounds, submit additional evidence and / or during appellant Proceedings." 2. Brief facts of the case are that the assessee is a Co-operative Credit Society registered under Maharashtra Co-operative Societies Act, 1960. The society provides credit facility to its members. The main activity of society is to take deposits from members, disburse loans to its members. For A.Y. 2014-15, the assessee filed Return of Income on 09.09.2014 declaring total income at Rs.Nil. As per the assessment order, the assessee's gross total income was Rs.36,09,944/- and assessee claimed deduction under section 80P of the Act. The as....
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....m the investments were made by the respondent assessee happens to be a co-operative bank. The income by way of interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact whether such income of interest is earned from a schedule bank or a cooperative bank and thus, clause (d) of Section 80P(2) of the Act would not apply in the facts and circumstances of the present case. The person or body corporate from which such interest income is received will not change its character, viz. interest income not arising from its business operations, which made it ineligible. I find that the issues are squarely covered by the Hon'ble Supreme Court of India and Hon'ble Karnataka High Court in the case of The Totagars Co-Operative Sale Society. 06. In view of the foregoing discussion, it is clear that the assessee-society was not entitled to claim deduction under chapter VIA of the Act and its claim was allowed by the Assessing Officer. In view of the forgoing wrong claim u/s 80P(2)(a)(i), the assessment completed under section 143(3) of the Income Tax Act, 1961, by the Income Tax Officer, Ward - 9(4), Pune, on 15.07.2016, for....
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....mits, record of population as per last census and the AO after considering the reply of Respondent, accepted the claim of Respondent. The ITAT has given a finding that the claim of capital gain was accepted by AO after necessary inquiry and the order under section 143(3) of the Act was passed. It is true that the AO has not passed any written detailed order while accepting the explanation of capital gains of Respondent but the fact is AO had raised queries and Respondent has given detailed reply means the AO has passed this order after making necessary inquiries. We agree with the view of the ITAT that the order of the AO cannot be branded as erroneous merely because the order does not contain the details which Principal Commissioner feels should have been included. The Principal Commissioner cannot decide how elaborate an order of the AO should be. Where the AO, during the scrutiny assessment proceedings, has raised a query which was answered by the Assessee to the satisfaction of the AO but the same was not reflected in the AO by him, the Commissioner cannot conclude that no proper inquiry with respect to the issue was made by the AO and enable him to assume jurisdiction under se....
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....Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exig....
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.... eligible for deduction on such interest u/s.80P(2)(a)(i) of the Act inasmuch as the assessee was engaged in providing credit facility to its members. At this juncture, it may be apposite to consider the mandate of clause (a) (i) of section 80P(2), which provides that: '(a) in the case of a cooperative society engaged in- (i) carrying on the business of banking or providing credit facilities to its members ...., the whole of the amount of profits and gains of business attributable to any one or more of such activities' shall be allowed as deduction. The assessee is admittedly a co-operative society engaged in carrying on the business of providing credit facilities to its members. In such a situation, the whole of the amount of profits and gains of business attributable to providing credit facilities to its members becomes deductible u/s 80P(2) of the Act. 6. The term "profits and gains of business attributable to" providing credit facilities has a wider connotation. It encompasses not only the income derived strictly from providing credit facilities to its members but also any other income which is attributable to such business. So long as there exists a live link, not nece....
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....he Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit v. ITO [IT Appeal No. 604(PN) of 2014, dated 19-8-2015] has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon'ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. v. ITO [2015] 55 taxmann.com 447/230 Taxman 309 allowing deduction u/s. 80P on interest income and that of the Hon'ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. v. CIT [2014] 50 taxmann.com 278/[2015] 229 Taxman 68 not allowing deduction u/s.80P on interest income earned from banks. Both the Hon'ble High Courts took into consideration the ratio laid down in the case of Totgar's Co-operative Sale Society Ltd. v. ITO [2010] 188 Taxman 282/322 ITR 283 (SC). There being no direct judgment from the Hon'ble jurisdictional High Court on the point, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred9 to go with the view in favour of the assessee by the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). 10. Insofar as the ....