THE PCIT-1, RAJKOT, RAJKOT V. SHRI BILESHWAR KHAND UDYOG KHEDUT SAHAKARI MANDLI LTD, KODINAR

ITA 130/RJT/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9391 (ITAT-RAJKOT)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2022
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 24-04-2022
• Court: TRIBUNAL
• Keywords: Revision of order; Depreciation
• Section: 263; 143(3); 80P

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER, And SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER आयकर अपील सं./ITA No. 130/Rjt/2022 िनधाᭅरण वषᭅ/Asstt. Years: 2017-2018 Shri Bileshwar Khand Udyog Khedut Sahakari Mandli Ltd., 1 st floor Administrative Building, Veraval Road, At. Kodinar, Dist. Gir Somanth. (Gujarat) PAN: AAAAB0936H Vs. The Principal Commissioner of Income Tax, Rajkot-1, Rajkot. Assessee by : Shri Mehul Ranpura, A.R Revenue by : Shri Aarsi Prasad, CIT. D.R सुनवाई कᳱ तारीख/Date of Hearing : 05/07/2022 घोषणा कᳱ तारीख /Date of Pronouncement: 07/09/2022 आदेश/O R D E R PER BENCH: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Principal Commissioner of Income Tax , Rajkot-1, Rajkot, dated 23/02/2022 arising in the matter of assessment order passed under s.263 of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2017-18. ITA No. 130/Rjt/2022 A.Y. 2017-18 2 2. The only interconnected issue raised by the assessee is that the learned Principal CIT erred in holding the assessment framed under section 143(3) as erroneous insofar prejudicial to the interest of Revenue. 3. The brief facts are that the assessee is a Cooperative society and claim to be engaged in the business of providing credit facility to its member. The PCIT on examination of the assessment records of the assessee, found that the assessee has claimed deduction under section 80P of the Act which includes interest income of Rs. 58,595/- earned on FD with SBI. However, the AO without properly examining the claim of the assessee allowed the deduction under section 80P of the Act. Accordingly, the PCIT initiated the proceedings under section 263 of the Act vide show cause notice dated 19 January 2022. 3.1 The assessee in response to such show cause notice submitted that it has not claimed deduction under section 80P on impugned interest income. The assessee submitted that income from the House property and other sources were set-off against the business loss of current year. 4. However, the ld. PCIT found the assessee in support of its contention only furnished copy of computation of income. Therefore, the assessee’s contention needs to be verified at the AO level. The fact is that that interest income earned by the co-operative society on account of deposits made with commercial bank is not allowable under section 80P(2)(i) read with 80P(4) of the Act. But the AO framed the assessment without conducting the necessary enquiries in this regard. Accordingly, the PCIT was of the view that the order passed by the AO was erroneous insofar prejudicial to the interest of revenue on account of non-proper verification which should have been done. Thus, the learned PCIT held the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial interest of revenue. ITA No. 130/Rjt/2022 A.Y. 2017-18 3 5. Being aggrieved by the order of the learned PCIT, the assessee is in appeal before us. 6. The learned AR before us filed a paper book running from pages 1 to 75 and contended that the assessee in the year under consideration has not claimed any deduction under section 80P of the Act as it has incurred business loss of Rs. 77,56,11,291/- which includes unabsorbed depreciation of Rs. 5,45,537/-. The interest income from FD with SBI and other interest income of Rs. 77,691/- shown under head other sources. The income from other sources of Rs. 77691 and house property income of Rs. 13,04,612/- were set off against the business loss. Therefore the finding of learned Pr. CIT is factually wrong. 7. On the contrary, the learned DR vehemently supported the order of the authorities below. 8. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates whether the assessment order has been passed by Ld. AO without making inquiries or verification with respect to claim under section 80P as discussed above and hence the assessment is erroneous insofar prejudicial to the interest of the Revenue and thus requiring revision by Pr. CIT u/s 263 of the Act. 8.1 At the outset we note that the learned AR before us submitted that the assessee has not claimed the deduction under section 80P of the Act and invited our attention to the copy of ITR form and computation of income which are placed on page 16 to 70 of the paper book. On perusal of the same we find that the assessee has incurred loss of Rs. 77,56,11,291/- from business. The alleged interest income from SBI bank which prompted the learned PCIT to initiate proceeding under section 263 of the Act was shown under the head income from other sources. Finally, the income from other sources along with income from the house property were adjusted against business loss of Rs. 77,56,11,291/-. Thus from the ITA No. 130/Rjt/2022 A.Y. 2017-18 4 computation of income and ITR form it is clear that the assessee has not claimed deduction under section 80P of the Act. Therefore, the question of making verification and enquiry with regard to the claim which has not been made by the assessee and holding the order as erroneous for the same is not justified. Thus, in our considered view there is no error in the order of the AO as alleged by the learned PCIT. Thus the revisional order passed by the learned PCIT is not sustainable and therefore we quash the same. Hence the ground of appeal of the assessee is allowed 9. In the result appeal of the assessee is allowed. Order pronounced in the Court on 07/09/2022 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 07/09/2022 Manish