2025 (8) TMI 518

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....CIT(A)] dated 27.03.2024 wherein the appeal filed by the assessee against the assessment order passed u/s 143(3) of the Income-tax Act, 1961 (the Act) dated 15.4.2021 by the National Faceless Assessment Centre, Delhi (NaFAC) [ld. AO] was partly allowed. 2. The assessee is before us raising the following grounds of appeal wherein it is contended that the interest earned by the co-operative society like assessee from Kerala Bank is eligible for deduction u/s. 80P(2)(a)(i) of the Act and further miscellaneous income is also eligible for deduction under that section :- "1. Assessee is in the business of providing credit facilities to its member. During the course of this business, assessee is required to maintain bank account with K....

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....s 80P of the Act. Similarly, he also held that miscellaneous income of Rs. 3,13,58,039 also does not qualify as business income and therefore deduction cannot be granted u/s. 80P(2)(a)(i) of the Act. Thereafter, assessment order was passed u/s. 143(3) of the Act wherein interest income on investment and miscellaneous income of Rs. 3.27 crores and Rs. 3.13 crores respectively is considered chargeable to tax under income from other sources. Accordingly total gross income of assessee from business was computed at Rs. 14,43,752 and income from other sources was computed at Rs. 6,40,51,683 resulted into gross assessed income of Rs. 6,54,95,436, therefrom deduction u/s 80P(2)(a)(i) of the Act was granted related to business income of co-operative....

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.... credit to the members and therefore deduction u/s. 80P(2)(a)(i) of the Act should be allowed on both incomes. 9. The ld. DR vehemently supported the order of ld. lower authorities and submitted that with respect to the interest income on investment, same was denied by the ld. CIT(A) u/s. 80P(2)(a)(i) of the Act but has allowed the claim of assessee u/s. 80P(2)(d) of the Act after verification. Therefore, there is no grievance. With respect to miscellaneous income, it was submitted that assessee has failed to substantiate before the ld. AO that miscellaneous income is part of the income from business of the assessee. Thus, there is no infirmity in the order of the ld. CIT(A). 10. We have carefully considered the rival contentions and ....

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....ee, denied deduction u/s. 80P(2)(a)(i) of the Act on miscellaneous income. Even on interest income though the ld. CIT(A) rejected the claim of assessee of deduction u/s. 80P(2)(a)(i) of the Act, but in fact directed the ld. AO to allow the claim of assessee after verification u/s. 80P(2)(d) of the Act. It would be pertinent to note that if the income of assessee is from interest income, but is attributable to the activity of providing credit facilities, then assessee is also eligible for deduction u/s. 80P(2)(a)(i) of the Act. However, necessary details were not produced before the ld. lower authorities by assessee, we restore the whole issue back to the file of the ld. AO, with a direction to the assessee to substantiate and prove that int....