Income-Tax Officer, Ward 3(1), , Nashik V. CD Patani Nagri Sahkari Pat Sanstha, , Nashik

ITA 727/PUN/2022

AI Insights

The case involves the Income Tax Officer, Ward-3(1), Nashik as the appellant and CD Patani Nagri Sahkari Pat Sanstha, Yeola as the respondent. The dispute arose from the assessment year 2017-18, where the Assessing Officer added Rs.1,21,99,435 as unexplained cash credit under section 68 of the Income Tax Act, 1961, due to cash deposits made during the demonetization period. The CIT(A) deleted this addition, a decision which the Revenue appealed against. The Tribunal, referencing similar cases and precedents, upheld the CIT(A)'s decision, emphasizing the need for the Revenue to substantiate its claims with independent inquiries.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134338 (ITAT-PUNE)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-09-2022
• Other Referred Cases: Sri Bhageeratha Pattina Sahakara Sangha Niyamitha vs. ITO, M/s.Bhagur Urban Credit Co-operative Society Ltd. vs. ITO, Prathamika Krushi Pattina Sahakari Sangha Niyamitha Itagi vs. ITO
• Laws Referred To: Income Tax Act, 1961, Maharashtra Co-operative Societies Act, 1960
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Co-operative Credit Society
• Section: 68; 143(3)

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.727/PUN/2022 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 The Income Tax Officer, Ward-3(1), Nashik. Vs CD Patani Nagri Sahkari Pat Sanstha, Yeola CS 4216, Yeola, Balaji Galli, Yeola, Nashik – 423401. PAN: AABAC 9272 A Appellant / Revenue Respondent /Assessee Assessee by Shri Pramod Shingte – AR Revenue by Shri M.G.Jasnani – DR Date of hearing 12/01/2023 Date of pronouncement 28/03/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Revenue is directed against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], Delhi for the A.Y. 2017-18 dated 08.08.2022 emanating from assessment order of Income Tax Officer, Ward-3(1), Nashik dated 28.12.2019 passed under section 143(3) of the I.T.Act, 1961. The Revenue has raised the following grounds of appeal: “1. Whether on the facts and in circumstances of the case, the Ld.CIT(A) is justified in deleting the addition of Rs.1,21,99,435/- made by the Assessing Officer on account of cash deposited in saving bank account during the demonetization period treating it as unexplained cash credit under section 68, read with section ITA No.727/PUN/2022 CD Patani Nagri Sahkari Pat Sanstha [R] 2 115BBE of the Income Tax Act, 1961 relying on the decision of the Hon’ble ITAT Bench Bengaluru in the case of Sri Bhageeratha Pattina Sahakara Sangha Niyamitha in ITA No.646/Bang/2021. 2. The order of the CIT(A) may be vacated and that of the Assessing Officer may be restored. 3. The assessee craves leave to add, amend, alter or delete any ground of appeal.” 2. The ld.Authorised Representative(ld.AR) of the assessee submitted that the assessee is a Co-operative Society engaged in the business of providing credit facilities and accepting deposits from its members. The assessee society is registered under section 8(1) of Maharashtra Co-operative Societies Act, 1960. During the scrutiny proceedings, the Assessing Officer(AO) observed that assessee had accepted cash in old currency from its members of Rs.,1,21,99,435/- during the demonetization period on various dates. The ld.AR submitted that all the details regarding members from whom these amounts were accepted were provided to the AO. The ld.AR further submitted that there are only three requirements under section 68 which assessee has to prove those are identity, creditworthiness and genuineness. Assessee had proved identity of the depositors, genuineness of the transactions, and the assessee being a cooperative credit society cannot ask the depositors to prove creditworthiness. If AO had any doubts AO could have issued summons and verified the same directly from the depositors. In this case, assessee is a Co- operative Society and it has accepted all the deposits from its ITA No.727/PUN/2022 CD Patani Nagri Sahkari Pat Sanstha [R] 3 members. Therefore section 68 itself is not applicable to the assessee Co-operative Society. The ld.AR relied on the order of the ITAT Pune in the case of M/s.Bhagur Urban Credit Co-operative Society Ltd., in ITA No.561/PUN/2022 dated 03.01.2023. DR Submissions: 3. The ld.Departmental Representative(ld.DR) for the Revenue relied on the orders of the Assessing Officer. Findings and Analysis: 4. We have heard both the parties and perused the records. It is observed that assessee is a Co-operative Credit Society engaged in the business of providing credit facilities and accepting deposits from its members. It is registered under section 9 of the Maharashtra Co- operative Societies Act. The Assessing Officer(AO) in the assessment order observed that assessee has deposited Rs.1,21,99,435/- in the form of banned currency notes during demonetization period. These deposits were accepted by the assessee after 08.11.2016. The assessee provided detailed list of customers from whom such banned currency notes were accepted as deposits and these were duly credited to those customers accounts. The assessee submitted during assessment proceedings that identity of persons and nature of deposits were duly explained and all ITA No.727/PUN/2022 CD Patani Nagri Sahkari Pat Sanstha [R] 4 relevant records were filed, hence, section 68 was not applicable in assessee’s case. However, the AO added Rs.1,21,99,435/- under section 68 of the Act as unexplained cash credits. There is no dispute that assessee provided list of customers who had deposited banned currency into the account. There is no dispute that all those persons were members of the assessee society. Once the assessee has filed all the relevant details regarding the depositors, the onus shifts on the revenue. The AO has not carried out any independent inquiries and merely added the amounts u/s 68. ITAT Pune Bench in ITA No.561/PUN/2022 for A.Y. 2017-18 dated 03.01.2023 has held in identical facts as under : “4. I have heard the rival submissions and perused the relevant material on record. It is seen that the assessee is a Urban Cooperative Credit Society which received Rs.1,78,400/- from 15 depositors whose all the necessary particulars have been given. The list comprises receipt of Rs.85,970/- from 3 small saving agents and Rs.94,000/- from 12 customers. The assessee furnished necessary details in respect of the depositors. The AO refused to accept the genuineness of the transaction and made the addition u/s.68 of the Act. The ld. AR has brought to my notice an order passed by the Bangalore Bench of the Tribunal in Prathamika Krushi Pattina Sahakari Sangha Niyamitha Itagi Pkpssn (ITA No.593/Bang/2021) dt. 01-06-2022 in which the addition made under similar circumstances has been deleted. In this order, the Tribunal relied on another order in Bhageeratha Pattina Sahakara Sangha Niyamitha Vs. ITO – ITA No.646/Bang/2021 dt. 18-02-2022, that has been referred to in para 5 of the order. No contrary order on ITA No.727/PUN/2022 CD Patani Nagri Sahkari Pat Sanstha [R] 5 such facts, in favour of the Revenue, has been brought on record by the ld. DR. Respectfully following the precedent, I overturn the impugned order and direct to delete the addition of Rs.1,78,500/- sustained in the first appeal.” 5. Respectfully following the decision of ITAT Pune Bench in the case of M/s.Bhagur Urban Credit Co-operative Society Ltd., in ITA No.561/PUN/2022, it is held that addition made by AO under section 68 are not maintainable. Accordingly, AO is directed to delete the addition of Rs.1,21,99,435/-. Thus, grounds of appeal raised by the Revenue are dismissed. 6. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 28 th March, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 28 th Mar, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.