| The Tax Publishers2021 TaxPub(DT) 6253 (Bang-Trib) INCOME TAX ACT, 1961
Section 80P
Apex Court had enunciated various principles in regard to deduction under section 80P. The Tribunal directed AO to follow the dictum laid down by Apex Court in the case of Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Anr. (2012) 431 ITR 1 (SC) : (2021) 123 Taxmann.com 161 (SC) : 2021 TaxPub(DT) 273 (SC), if the assessee receives/earns interest/dividend income out of investments with co-operative society, the same was entitled to deduction under section 80P(2)(d), thus, AO was directed to examine the claim of deduction under section 80P(2)(d) afresh.
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Deduction under section 80P - Allegation that interest/dividend income was earned out of investments with co-operative banks - Eligibility of -
Assessee was providing credit facilities to its members and claimed deduction under section 80P. AO denied the deduction claimed by assessee holding that assessee had violated the principles of mutuality by placing reliance on the Apex Court in the case of Citizen Co-operative Society Ltd. v. Asstt. CIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC). AO also held that since interest/dividend income was earned out of investments with co-operative banks. CIT(A) held that assessee was having substantial dealings with non-members, thus not entitled to any deduction.Held: Apex Court had enunciated various principles in regard to deduction under section 80P. On identical factual situation, Tribunal in the case of Ravindra Multipurpose Cooperative Society Ltd. v. ITO in ITA No.1262/Bang/2019, order dt. 31-8-2021 : 2021 TaxPub(DT) 4964 (Bang-Trib) had remanded the issue to AO for de novo consideration. The Tribunal directed AO to follow the dictum laid down by Apex Court in the case of Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Anr. (2012) 431 ITR 1 (SC) : (2021) 123 Taxmann.com 161 (SC) : 2021 TaxPub(DT) 273 (SC). In the present case, CIT(A) had not adjudicated the same for the reason that assessee has violated the principle of mutuality. If the assessee receives/earns interest / dividend income out of investments with co-operative society, the same was entitled to deduction under section 80P(2)(d). Thus, AO was directed to examine the claim of deduction under section 80P(2)(d) afresh.
Followed:Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Anr. (2012) 431 ITR 1 (SC) : (2021) 123 Taxmann.com 161 (SC) : 2021 TaxPub(DT) 273 (SC), Citizen Co-Operative Society Ltd. v. Asstt. CIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC), Totgars Co-operative Sale Society v. Pr. CIT [Review Petition Nos.100085-100093/2017 in ITA No.100066/2016 C/W ITA Nos.100064/2016, 100065/2016, 100067/2016, 100068/2016 & ITA Nos.100051-100054/2016, dt. 22-9-2017] Pr. CIT v. The Totagars Co-Operative Sale Society (2017) 395 ITR 611 (Kar) : 2017 TaxPub(DT) 1748 (Karn-HC), Totgars' Co-Operative Sale Society Ltd. v. ITO (2015) 58 Taxmann.com 35 (Karn) Ravindra Multipurpose Co-operative Society Ltd. v. ITO [ITA No.1262/Bang/2019, order dt. 31-8-2021] : 2021 TaxPub(DT) 4964 (Bang-Trib).
REFERRED :
FAVOUR : Matter remanded.
A.Y. :
IN THE ITAT, BANGALORE BENCH
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