TaxTMI 
TaxTMI 
2022 (8) TMI 1132
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.... of the learned P.C.I.T in so far as it is against the appellant is opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned P.C.I.T. failed to appreciate that there was no error much less an error prejudicial to the interest of the revenue in the order passed by the learned Assessing Officer warranting revision u/s.263 of the Act and consequently, the order passed by the P.C.I.T. is opposed to law and facts of the appellant's case and requires to be cancelled. 3. Without prejudice to the above, the learned PCIT failed to appreciate that the learned A.O. had passed the order u/s 143(3) after making sufficient inquiries and with proper application of mind, and thus t....
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....he learned PCIT is not justified in law in directing the learned A.O to deny the alternate claim for deduction u/s 80P(2)(d) of the Act to the extent of income earned from co-operative banks which are nothing but cooperative societies in possession of a license from the RBI under the facts and in the circumstances of the appellant's case. 7. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered." 3. The brief facts of the case are as follows: The assessee is a Co-operative Society, engaged in the business of providing credit facilities to its members. For the relevant assessment year 2017-2018, the return of i....
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....e Society Ltd. v. ITO reported in (2010) 322 ITR 283 (SC) and the judgment of the Hon'ble jurisdictional High Court in the case of Pr.CIT & Anr. v. Totagars Co-operative Sale Society reported in (2017) 395 ITR 611 (Kar.). 5. The assessee filed the objections to the show cause notice issued u/s 263 of the I.T.Act. It was submitted that as regards the cash deposits, the entire details were provided to the A.O. It was stated that the A.O. passed order u/s 143(3) of the I.T.Act after making sufficient inquiries and with proper application of mind. Therefore, it was contended that the assessment order cannot be labeled as erroneous, warranting interference u/s 263 of the I.T.Act. As regards the claim of deduction u/s 80P(2)(a)(i) of the I.T.A....
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....iries and has not made the additions required as per law. Considering these facts, the assessment order is erroneous and prejudicial to the interest of Revenue in terms of section 263. 20. As further discussed above, interest income should have been taxed u/s 56 and deduction u/s 80P(2)(a)(i) and u/s 80P(2)(d) was not allowable. The Assessing Officer has not examined this issue at all and has not conducted necessary inquiries. He has not made the addition required as per the binding judicial decisions discussed above. Considering these facts, the assessment order is erroneous and prejudicial to the interests of the Revenue in terms of section 263. 21.............. 22............. 23. In view of the above ....
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....same were filed before him (pages 89 to 102 of the paper book). The learned AR submitted that specific directions under paragraph 19 of the impugned order of the PCIT mandates the A.O. to make additions of the cash deposits irrespective whether the assessee is able to prove the source of cash deposits. Insofar as the deduction u/s 80P(2)(a)(i) is concerned, the learned AR's limited submission is that majority of the interest income is earned out of investments made with Central Co-operative Banks and is in compliance with the requirement under the Karnataka Co-operative Societies Act and Rules. Therefore, it was submitted that the amounts which are invested in compliance with the Karnataka Co-operative Societies Act and Rules, necessarily, ....
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....tutory compulsions under the Karnataka Co-operative Societies Act and Rules. Hence, the receipt of interest income has nexus with business of the assessee. In this context, the learned AR had relied on the order of the Bangalore Bench of the Tribunal in the case of M/s.Vasavamba Co-operative Society Ltd. v. The Pr.CIT (supra) and Uppinangady Co-operative Agricultural Society Limited v. ITO (supra). We find merit in the alternative submission of the learned AR that if interest income is earned out of investments made with Central Co-operative Banks and is in statutory compliance with the Karnataka Co-operative Societies Act and Rules, such investments have business nexus and should be considered as income derived from business of providing c....