The Tax Publishers2020 TaxPub(DT) 5421 (Coch-Trib)

INCOME TAX ACT, 1961

Section 80P(2)(a)(i)

Narration in loan extracts/audit reports by itself might not be conclusive to prove whether loan was agricultural loan or non-agricultural loan. Necessarily, AO had to examine details of each loan disbursement and determine the purpose for which loans were disbursed and accordingly to decide the issue of allowability of deduction under section 80P(2)(a)(i).

Deduction under section 80P(2)(a)(i) - Co-operative society - AO on mere perusal of narration in the loan extracts disallowed deduction -

Assessee, a co-operative society registered under Kerala Co-operative Societies Act, 1969, claimed of deduction under section 80P. AO disallowed deduction on the ground that assessee was essentially doing business of banking and disbursement of agricultural loans by assessee was only minuscule and, therefoe, in view of insertion of section 80P(4) with effect from 1-4-2007, assessee was not entitled to deduction under section 80P. Held: AO after perusing narration in the loan extracts for financial period under consideration, came to the conclusion that out of total loan disbursement, only a minuscule portion had been advanced for agricultural purposes. The narration in loan extracts/audit reports by itself might not be conclusive to prove whether loan was agricultural loan or non-agricultural loan. Necessarily, AO had to examine details of each loan disbursement and determine the purpose for which loans were disbursed. Accordingly, issue was remanded to AO for examination afresh.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2013-14, 2016-17 & 2017-18



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