Gross receipt calculated by reducing deductions for the purpose of sec. 80P is valid: ITAT

Case Details: Malwa Co-op. L & C Society Ltd. v. Income-tax Officer - [2022] 145 taxmann.com 308 (Amritsar-Trib.)

Judiciary and Counsel Details

• • Dr M.l. Meena, Accountant Member & Anikesh Banerjee, Judicial Member
  • Tarun Bansal, Adv. & Lakshay Bansal, CA for the Appellant.
  • S.M. Surendranath, Sr. DR for the Respondent.

Facts of the Case

Assessee-society engaged in the collective disposal of labour of its members. During the relevant assessment year, the assessee filed its return of income by reducing the gross receipts to the extent of TDS, VAT and cess and claimed deduction under section 80P(2)(a)(vi).

During the assessment proceedings, the Assessing Officer enhanced the gross receipts by the amount of TDS, VAT and Cess and converted the deduction under 80P(2)(a)(vi) to deduction u/s 80P(2)(c), i.e., Rs. 50,000 and computed the income accordingly. Aggrieved by the order, the assessee filed an appeal to CIT(A).

On appeal, CIT (A) upheld the order of AO. Aggrieved-assessee preferred an instant appeal to the Amritsar Tribunal.

ITAT Held

The Tribunal held that the assessee had computed the income correctly. The gross receipts must be computed by allowing the reasonable deduction of TDS, VAT, Cess and other deductions.

Further, it was held that the assessee is eligible for deduction u/s 80P(2)(a)(vi) as the assessee is a registered society engaged in the collective disposal of labour of its members.

Therefore, the disallowance made by AO must be deleted, and the assessee’s appeal is allowed.

List of Cases Reviewed

• • CIT v. Gurdaspur Hardochhanni Co-op. L/C Society [2007] 164 Taxman 607/[2008] 303 ITR 145 (Punj. & Har.) (para 5) followed.

List of Cases Referred to

• • CIT v. Gurdaspur Hardochhanni Co-op. L/C Society [2007] 164 Taxman 607/[2008] 303 ITR 145 (Punj. & Har.) (para 5).