2026 (8) TMI 1735

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....ing for the appellant and learned Senior Advocate Mr. Tushar Hemani assisted by learned advocate Ms. Resham Thakkar appearing for the respondent. 2. This Tax Appeal is preferred under Section 260A of the Income Tax Act, 1961 (For Short "the Act") by the appellant - Revenue proposing the following substantial questions of law arising out of the order dated 30.11.2023 passed by the Income Tax Appellate Tribunal, Ahmedabad "D" Bench, Ahmedabad (For short "the Tribunal") in ITA No. 1079/Ahd/2017 for Assessment Year 2012-13 : "(a) Whether in the facts and circumstances of the case and in law, the learned ITAT has erred in setting aside the order passed by Pr. CIT under Section 263 of the Income Tax Act, 1961 without considering the f....

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....ation of the assessment order passed by the AO under Section 143(3) of the Act it is noticed that an amount of Rs.41,31,31,877/- has been allowed under Section 80P(2)(a)(i) of the Act as claimed by you, However, on verification of the case records, it is noticed that you have earned interest income of Rs. 87,52,62,067/- from members of your society and readable expenditure thereon works out to Rs. 51,04,48,688/- and hence the profit thereon works out to Rs.36,73,36,662/- only. The deduction of Rs. 41,31,31,877/- under Section 80P(2)(i) of the Act claimed and allowed by the AO is found to be incorrect." 3.2. The assessee by reply dated 03.03.2017 submitted that the only business of the assessee - society is agriculture. It was submitted t....

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....he Income Tax Act, 1961, I hereby set aside the assessment proceedings with the direction to the assessing officer to frame the assessment afresh after proper examination, enquiry and verification on all the issues including these cited above and after allowing reasonable opportunity to the assessee." 3.3. Being aggrieved by the order dated 20.03.2017, the assessee preferred an appeal before the Tribunal. The Tribunal after considering the facts of the case held that the Pr. CIT was not justified in holding that deduction under Section 80P2(a)(i) of the Act could be only Rs.36 Crores and not Rs. 41 crores as the Pr. CIT has not given any justification in restricting the addition under Section 80P(2)(a)(i) of the Act. The Tribunal therefo....

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....ing in the Statement of Income. 5.1. It was submitted that the assessee has earned interest income out of the loan advances given to its members amounting to Rs.87,52,62,067/- which is claimed under Section 80P (2)(a)(i) of the Act but restricted to the total income only and interest on investment in co-operative society is Rs.24,73,283/- claimed under Section 80P 2(d) of the Act. It was submitted that Pr. CIT has failed to consider the Tax Audit Report which clearly shows that there was no interest earned on Fixed Deposit which is claimed under Section 80P (2)(a)(i) of the Act, but it is only on the interest on advances to the members which is claimed by the assessee. It was, further submitted that there is no question of allocation of ....