SRP GROUP SAHAKARI MANDALI LTD.,AHMEDABAD vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,CIR -7(2), AHMEDABAD

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ITA 2525/AHD/2016Status: DisposedITAT Ahmedabad28 November 2017AY 2009-104 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the assessee's contention that only the net income attributable to non-eligible activities should be disallowed, not the gross amounts. Therefore, the issue was remitted back to the Assessing Officer for re-computation.

What were the facts?

The assessee, a credit co-operative society, claimed deduction under Section 80P on various business activities. The Assessing Officer disallowed the deduction for activities other than interest income, considering them not eligible for a credit co-operative society.

What were the issues?

Whether the disallowance of deduction under Section 80P should be on gross or net income basis for non-eligible business activities of a credit co-operative society.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: Shri Rajpal Yadav & Shri Amarjit Singh

For Appellant: Shri Pritesh Shah, A.R
For Respondent: Shri Prasoon Kabra, Sr. D.R, Shri Pritesh Shah, A.R

PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

The present three appeals are directed at the instance of assessee against the order of ld. CIT(A) dated 05-08-2016 for assessment years 2009-10, 2010-11 & 2012-13. 2. The solitary grievance is that ld. CIT(A) has erred in confirming the disallowance of exemption claim u/s. 80P of the income tax act. With the assistance of ld. representatives, we have gone through the I.T.A Nos. 2525 to 2527/Ahd/2016 A.Y. 2009-10, 2010-11 & 2013-14 Page No 2 records carefully. The facts of all these appeals are common in all these three assessment years, therefore, for the facility of reference, we are taking the fact of assessment year 2009-10 as a lead case and its findings will be applicable to the other two appeals of assessment years 2010-11 and 2013-14 . It is pertinent to observe that assessee is a credit co-operative society. It has claimed deduction u/s. 80P on following items:- Sr. No. Business Activities Net Profit in Rs. 1 Net Internet Income (Balance of 15,58,680/- returned income less net income earned from other business activating mentioned below from Sl. No. 2 to 10 2 Rental income 103904 3 Torrent Bill Collection Commission 36064 4 Mineral Water Sale 36918 5 Gas distribution 429096 6 Poultry Sale 118140 7 Bakery 55632 8 Milk/Ice Cream 46946 9 STD PCO 60964 10 Provision/Grain Store 2959 TOTAL 24,49,303/-

On analysis of the records, ld. assessing officer found that assessee is a credit co-operative society and not a labour society, therefore, it is not entitled for deduction qua the interest income generated on following activities:- Sr. No. Business Activities Net Profit in Rs. 1 Rental Income 103904 2 Torrent Bill Collection Commission 36064 3 Mineral Water Sale 36918 4 Gas distribution 429096 5 Poultry Sale 118140 6 Bakery 55632 7 Milk/Ice Cream 46946 8 STD PCO 60964

I.T.A Nos. 2525 to 2527/Ahd/2016 A.Y. 2009-10, 2010-11 & 2013-14 Page No 3 Provision / Grain Store 2959 TOTAL 890623 After examining the record, ld. assessing officer has disallowed the deduction u/s. 80P on items except interest income earned by assessee. In this way, in assessment year 2009-10, the assessing officer has made similar disallowance in assessment years 2010- 11 and in the assessment year 2013-14 respectively.

3.

Appeal to ld. CIT(A) did not bring any relief to the assesseee

4.

At the very outset, ld. counsel for the assesee submitted that assessing officer has erred in computing the amounts for making disallowance u/s. 80P on gross basis. The activity which does not qualify for grant of exemption u/s. 80P(2) which have only net income relatable to those activities ought to be computed for disallowance of exemption. We find force in this contention of learned counsel for the assessee, therefore, we remit this issue to the file of ld. assessing officer for all three years. Ld. assessing officer shall determine the net income attributable to each activity and thereafter exclude those amounts from the claim made u/s. 80P(2).

5.

In the result, all the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 28 -11-2017 (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER

I.T.A Nos. 2525 to 2527/Ahd/2016 A.Y. 2009-10, 2010-11 & 2013-14 Page No 4 Ahmedabad : Dated 28/11/2017 आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:-

1.

Assessee

2.

Revenue

3.

Concerned CIT

4.

CIT (A)

5.

DR, ITAT, Ahmedabad

6.

Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, अहमदाबाद

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