| The Tax Publishers2022 TaxPub(DT) 0787 (Pune-Trib) INCOME TAX ACT, 1961
Section 263 Section 80P(2)(d)
Where AO, while framing assessment took a possible view and allowed assessee's claim for deduction under section 80P(2)(d) on interest income earned on its investments/deposits with co-operative banks; CIT was not justified in exercising his revisional jurisdiction under section 263 for dislodging the said view of the AO and consequently, the revision order passed by the CIT under section 263 was liable to be set aside.
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Revision under section 263 - Erroneous and prejudicial order - AO took a possible view -
Assessee-co-operative society filed its return of income for relevant assessment year and assessment was completed under section 143(3). Thereafter, CIT observed that the assessee claimed deduction under section 80P(2)(d) in respect of interest income from FDs with co-operative banks, which was allowed by the AO. CIT was of the view that the assessee was not eligible for said claim of deduction under section 80P (2)(d) as co-operative banks were commercial banks and not co-operative societies. Accordingly, he held that the assessment order under section 143(3), allowing the assessee's claim for deduction under section 80P(2)(d), was erroneous and prejudicial to the interest of Revenue. Held: In view of various judicial pronouncements, interest income earned by a co-operative society on investments with a co-operative bank would be eligible for claim of deduction under section 80P(2)(d). Thus, AO while framing assessment took a possible view and allowed assessee's claim for deduction under section 80P(2)(d) on interest income earned on its investments/deposits with co-operative banks. Therefore, CIT was not justified in exercising his revisional jurisdiction under section 263 for dislodging the said view of the AO. Accordingly, the revision order passed by the CIT under section 263 was set aside.
REFERRED : The Pr. CIT, ITO v. The Tot agars Co-operative Sale Society (2017) 395 ITR 611 (Karn) : 2017 TaxPub(DT) 1748 (Karn-HC), The Pr. CIT, v. The Tot agars Co-operative Sale Society (2017) 392 ITR 74 (Karn) : 2017 TaxPub(DT) 0677 (Karn-HC), State Bank of India (SBI) v. CIT (2016) 389 ITR 578 (Guj) : 2016 TaxPub(DT) 3564 (Guj-HC), K. Subramanian, ITO, & Anr. v. Siemens India Limited & Anr. (1985) 156 ITR 11 (Bom) : 1985 TaxPub(DT) 0158 (Bom-HC), M/s. Solitaire CHS Ltd. v. Pr. CIT [ITA No. 3155/MUM/2019; dated 29-11-2019 ( ITAT “G” Bench, Mumbai)] : 2019 TaxPub(DT) 8002 (Mum-Trib), Majalgaon Sahakari, Sakhar Karkhana Ltd. v. ACIT, Shri Chhatrapati Shahu, Dy. CIT [ITA No. 308/PUN/2018 (ITAT Pune)] : 2019 TaxPub(DT) 2137 (Pune-Trib), Kaliandas Udyog Bhavan Premises Co-op Society Ltd., v. ITO [ITA No. 6547/MUM/2017 (ITAT Mumbai)] : 2018 TaxPub(DT) 3128 (Mum-Trib)
FAVOUR : In assessee's favour.
A.Y. :
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