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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI RAJPAL YADAV, HON’BLE & SHRI WASEEM AHMED HON’BLE
आयकर अपील�य अ�धकरण, राजकोट �यायपीठ, राजकोट । IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV, HON’BLE JUDICIAL MEMBER AND SHRI WASEEM AHMED HON’BLE ACCOUNTANT MEMBER ITA.No.41/RJT/2012 �नधा�रण वष�/Asstt.Year : 2007-08 Shri Sadguru Credit Cooperative ITO, Ward-5(2) Rajkot. Society Ltd. Vs Shop NO.FF-127/128, Plenary Arcade, Dhebar Road Opp: Kadvibai Vidyalay Rajkot 360 002. अपीलाथ�/ (Appellant) �� यथ�/ (Respondent) Assessee by : Shri D.M. Rindani, AR Revenue by : Shri Anil Kumar Das, DR सुनवाई क� तार�ख/Date of Hearing : 16/09/2019 घोषणा क� तार�ख /Date of Pronouncement: 16/09/2019 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER Assessee is in appeal before the Tribunal against order of ld.CIT(A)- IV, Rajkot dated 26.12.2011 passed for the Asstt.Year 2007-08.
Assessee has taken following rounds of appeal: “1. The ld.CIT(A)-IV, Rajkot erred in sustaining the disallowance of commission expenses of Rs.4,43,974/- under section 40(a)(ia) for non- deduction of TDS under section 194H of the Act. 2 The ld.CIT(A)-IV, Rajkot erred in not allowing deduction under section 80P of the Act in respect of total income.
ITA No.41/RJT/2012 2 3. Appeal of the assessee was dismissed by the Tribunal vide order dated 8.6.2012. The assessee has filed Misc. Application bearing MA No.7/RJT/2016. This MA has been allowed by the Tribunal vide order dated 12.9.2019. By way of this order, Tribunal has restored ground no.2 for re- adjudication on the ground that an apparent error was committed by the Tribunal while adjudicating the ground no.2 raised by the assessee.
The ld.counsel for the assessee contended that deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 was denied to the assessee by taking cognizance of section 80P(4) and construing that the assessee was engaged in the business of banking, therefore, it is not entitled for deduction. According to the ld.counsel for the assessee, basically assessee is not in the business of banking, rather it is co-operative credit society and extending credit facilities to its members. He took us through first paragraph of the assessment order wherein the AO has noticed the business of the assessee as providing credit facilities to its members. According to the ld.counsel for the assessee, once any disallowance is being made, then gross income of the assessee would enhance and it will be entitled for deduction under section 80P(2)(a)(i) of the Act. He took us through the impugned orders, and contended that being credit society it is entitled for deduction under section 80P(2)(a)(i). Once the AO has made certain disallowance then its alternative claim pleaded before the AO made in the submissions ought to have been considered.
On the other hand, the ld.DR took us through the order of the ld.CIT(A) and contended that the ld.CIT(A) has rejected the claim of the assessee on the ground that in the return of income it has not claimed deduction under section 80P(2)(a)(i) of the Act. 6. We have duly considered rival submissions and gone through the record carefully. There is no dispute with regard to the fact that the assessee
ITA No.41/RJT/2012 3 is cooperative credit society providing credit facilities to its members. The assessee in its reply filed before the AO which has been reproduced at page no2 and 3 of the assessment order, specifically pleaded that being a cooperative credit society, it its entitled for deduction under section 80P(2)(a)(i) of the Act. This aspect has not been examined by the authorities below. It has been brought to our notice that the assessee has total interest receipt of Rs.13,30,467/- from the members, whereas interest income on deposits is only Rs.1,170/-. According to the assessee deduction under section 80P(2)(a)(i) of the Act ought to have been granted on this interest income from the members. This aspect has not been verified by the authorities below. Therefore, we deem it appropriate to set aside the issue to the file of the AO for verification and examination. The ld.AO shall determine the income eligible for grant of deduction under section 80P(2)(a)(i) to the assessee, because the assessee is entitled for deduction under section 80P(2)(a)(i) being a cooperative credit society. The AO shall verify all these aspects and adjudicate the issue afresh.
It is needless to say that the observations made by us will not impair or injure the case of the AO and will not cause any prejudice to the defence/explanation of the assessee.
In the result, ground no.2 of appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 16th September, 2019 at Rajkot.
Sd/- Sd/- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot; Dated 16/09/2019