INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P(2) - Assessee had not given segment wise details of income earned by it from the core activity as well as from the non-core activity - -

Assessee was carrying on the business of banking or providing credit facilities to its members, purchase of agriculture implements, seeds, fertilizers, livestock and other articles used for agriculture activities. It claimed deduction under section 80P. AO denied the claim of deduction under section 80P on the ground that assessee had not furnished the requisite details regarding claim of deduction under section 80P.Held: Some of the income was earned by assessee from the activity of selling the commodities like Sugar, Kerosene, Wheat etc. under the Public Distribution Scheme. These activities were not the core activity of assessee society and income from these activities would not be eligible for deduction under section 80P. Core activity of assessee society which includes credit facilities to its Members and supply of fertilizers and other materials used in agricultural activity to members, the same is eligible for deduction under section 80P. In absence of these segmentwise details and income from different activities bifurcating into the category of core activity and ancillary activity to the core activity as well as non-core activity, it was not possible to consider the claim of deduction under section 80P. Therefore matter was remanded back to AO to verify the segmentwise details of income from core activities of the assessee as well as non-core activity to be filed by the assessee and then allow the claim of the assessee under section 80P.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2016-17

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