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the Assessing Officer had denied a portion of claim of deduction u/s 80P of the I.T.Act for the reason that assessee was essentially doing the business of banking and disbursement of agricultural loans by the assessee was only minuscule. Therefore, the Assessing Officer concluded to the extent of the disbursement of agricultural loan alone, assessee is entitled to deduction u/s 80P(2) of the I.T.Act. The Assessing Officer after perusing the narration of the loan extracts for the financial period 2009-2010 and 2013-2014, came to the conclusion that out of the total loan disbursement, only a minuscule portion has been advanced for agricultural purposes. The narration in loan extracts / audit reports by itself may not conclusive to prove whether loan is a agricultural loan or a non-agricultural loan. The gold loans may or may not be disbursed for the purpose of agricultural purposes. Necessarily, the A.O. had to examine the details of each loan disbursement and determine the purpose for which the loans were disbursed, i.e., whether it is for agricultural purpose or non-agricultural purpose. In these cases, such a detailed examination has not been conducted by the A.O. Further, the A.O. has not examined to what extent loans, if any, has been disbursed to non-members. we are of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not.It is ordered accordingly.

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Sec. 80P(2)(a)(i) of Income Tax Act, 1961— Deduction - Appellant is not a Co-operative Bank in as much as appellant is not a State Co-operative Bank or a Central Co-operative Bank or a Primary Co-operative Bank. On a claim for deduction under Section 80P of the IT Act, the AO has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of Section 80P of the Act. - POOMANGALAM SERVICE CO-OPERATIVE BANK LIMITED V/s ITO - [2020] 185 ITD 474 (ITAT-COCHIN)