Appeal details
Counselvise Citation
[2023] 100 COUNSELVISE.COM (IT) 5673 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-11-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
SMC
Next Hearing Date
31-10-2023
Assessment Year
2014-2015
Appeal Filed On
17-05-2023
Judgement Text
ITA No.391/Ahd/2023 Assessment Year: 2014-15 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.391/Ahd/2023 Assessment Year: 2014-15 The Vijaynagar Nagrik Sarafi Sahakari Mandali Limited, Vijaynagar Road, At. Vijaynagar, Post – Vijaynagar, Ta. Vijaynagar – 383 460, Gujarat. [PAN – AABFT 4774 H] Vs. The Income Tax Officer, S.K. Ward – 2, Himatnagar. (Appellant) (Respondent) Assessee by Shri K.C. Thaker, AR Revenue by Shri Santosh Kumar, Sr. DR Da te o f He a r in g 01.11.2023 Da te o f P ro n o u n ce m e n t 03.11.2023 O R D E R This appeal is filed by the Assessee against order dated 23.03.2023 passed by the CIT(A)-11, Ahmedabad for the Assessment Year 2014-15. 2. The Assessee has raised the following grounds of appeal :- “1. The learned CIT(A)-11, Ahmedabad, has erred in law and on facts in upholding the disallowance made by the AO of the claim u/s.80P(2)(d) of the Act, of Rs.4,12,210/- thereby dismissing the appeal. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) ought to have allowed the appeal and ought to have deleted the disallowance of Rs.4,12,210/- 3. It is therefore prayed that the appeal may be allowed and the disallowance of Rs.4,12,210/- upheld by the CIT(A)-11, Ahmedabad, may be deleted.” 3. The assessee Co-operative Mandali is engaged in providing the banking credit facility to its members. The return of income for A.Y. 2014-15 was filed by the assessee on 07.09.2015 showing total income of Rs. Nil after claiming deduction under Section 80P of the Income Tax Act, 1961 of Rs.12,04,056/-. The ITA No.391/Ahd/2023 Assessment Year: 2014-15 Page 2 of 3 same was processed u/s 143(1) of the Act. The case was selected for limited scrutiny under CASS with reason large deduction under Chapter VI-A of Income Tax Act, 1961. Notice u/s 143(2) of the Act was issued on 19.09.2016 which was duly served on assessee. The assessee filed details. The Assessing Officer observed that the assessee is a Co-operative Society and received interest from the Sa.Co. Bank (Rs.2,86,317/-), Dena Bank (Rs.47,879/-) as well as Saving Bank interest of Rs.47,547/- and Rs.30,472/- is not allowable. The Assessing Officer therefore, disallowed interest received on FD with Banks of Rs.4,12,210/- . 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the Assessing Officer has no clarity about the provisions of Section 80P of the Act, as would be seen from the observations related to the judgment of the Hon’ble Gujarat High Court in para 2 of the order. The Ld. AR submitted that the Assessing Officer made the disallowance only because according to him the interest was received on FD with Banks. The Ld. AR submitted that out of total interest received of Rs.4,12,210/- in four accounts as mentioned in the order, interest of Rs. 2,86,317 and Rs.30,472/- was received from S. K. Dist. Co-op Bank Ltd. and Rs.47,879/- and Rs.47,542/- was received from Dena Bank. The Ld. AR further submitted that the assessee is a Sharafi Mandali i.e. Credit Society carrying on the business of banking or providing credit facilities to its members and is therefore eligible for deduction u/s. 80P(2)(a)(i) of the Act for “the whole of the amount of profits and gains of business attributable to (any one or more of) such activities.” The interest income earned by the assessee is incidental to its business of providing credit facilities to members of the Society and forms part of the profit of Rs.10,41,989/-, the whole of which amount is admissible for deduction u/s. 80P(2)(a)(i) of the Act. Though the interest received from Dena Bank is not allowable yet the interest earned from S.K. Dist. Co-op Bank has to be allowed in light of the decision of the Hon’ble Gujarat High Court in case of CIT vs. Sabarkantha Dist. Co-op. Milk Producers’ Union Ltd. (Tax Appeal No.473 of 2014 order dated 16.06.2014). 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The Ld. DR further submitted that interest earned from District Co-operative ITA No.391/Ahd/2023 Assessment Year: 2014-15 Page 3 of 3 Banks cannot be treated at par with the business income of the assessee as it forms income from other sources. 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee earned interest on Fixed Deposits from the S. K. District Co-operative Bank Ltd. as well as Dena Bank. As per the decision of Hon’ble Gujarat High Court in case of Sabarkanta District Co-op. Milk Producers’ Union Ltd. (supra) the credit society is allowed deduction under Section 80P(2)(d) of the Act, if the interest on FD is earned from District Co- operative Bank. Therefore, in the present assessee’s case the same should have been considered by the CIT(A). Thus, it is directed to the Assessing Officer to allow the assessee benefit of deduction under Section 80P(2)(d) of the Act in respect of interest earned on FD from S.K. District Co-op. Bank Ltd. and disallowance to the interest earned from Dena Bank is upheld. The appeal of the assessee is partly allowed. 8. In result, appeal of the assessee is partly allowed. Order pronounced in the open Court on this 3 rd November, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 3 rd November, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
