The SACO Bank Staff Co.Op. Credit Society Ltd., Himatnagar V. The ITO, Ward-1, Himatnagar

ITA 441/AHD/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0216 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 31-10-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 28-05-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80P

Judgement Text

ITA No.441/Ahd/2023 Assessment Year: 2018-19 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.441/Ahd/2023 Assessment Year: 2018-19 The SACO Bank Staff Co-op. Credit Society Limited, C/o. Head Office, SACO Bank, Himatnagar, Dist. Sabarkantha, - 383 001 Gujarat. [PAN – AAAAT 9257 F] Vs. The Income Tax Officer, Ward – 1, 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 11.05.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2018-19. 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.2,03,169/- 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.2,03,169/- 3. It is therefore prayed that the appeal may be allowed and the disallowance of Rs.2,03,169/- upheld by the CIT(A)-11, Ahmedabad, may be deleted.” 3. The assessee is a registered co-operative society and engaged in business of providing credit facility to its registered members. The assessee society filed its return of income on 12.07.2018 for A.Y. 2018-19 declaring total income of ITA No.441/Ahd/2023 Assessment Year: 2018-19 Page 2 of 3 Rs.15,70,747/-. The case was selected for scrutiny and accordingly notices were issued and served. During the course of assessment proceedings the Assessing Officer issued notice regarding claim of deduction u/s. 80P of the Income Tax Act, 1961 in respect of receipt of interest of Rs.2,03,169/- from S. K. District Co-op. Bank Ltd. After taking cognizance of the assessee’s reply, disallowed deduction u/s. 80P(2)(d) of the Act. 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 total interest received of Rs.2,03,169/- from S. K. Dist. Co-op. Bank Ltd. 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, the whole of which amount is admissible for deduction u/s.80P(2)(a)(i) of the Act. The Ld. AR further submitted that 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. Coop. 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 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 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 Cooperative Bank. Therefore, in the present assessee’s case the same should have been considered by the ITA No.441/Ahd/2023 Assessment Year: 2018-19 Page 3 of 3 CIT(A). Thus, the assessee is entitled to claim the deduction under Section 80P(2)(d) of the Act in respect of interest earned on FD from S.K. District Co-op. Bank Ltd. The appeal of the assessee is allowed. 8. In result, appeal of the assessee is 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