Udyan Large Size Multipurpose Co-Operative Society Ltd., Balapur, Dakshin Dinajpur V. I.T.O., Ward - 3(4), Balurghat presently at I.T.O., Verification Unit, Malda, Dakshin Dinajpur

ITA 781/KOL/2022

AI Insights

The case involves Udyan Large Size Multipurpose Cooperative Society Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi. The appeal was directed against the assessment order under section 143(3) of the Income Tax Act for the assessment year 2017-18, which included an addition of Rs.9,92,664 as income from other sources. The Tribunal found that this income was part of the Society's regular activities and should not be treated as income from other sources, thus eligible for deduction under section 80P.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129159 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 27-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 28-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80P; 69A

Judgement Text

ITA No. 781/KOL/2022 A.Y. 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Dr. Manish Borad, Accountant Member I.T.A. No. 781/KOL/2022 Assessment Year: 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited,......................Appellant Vill. & P.O. Balapur, P.S. Tapan, Dist. Dakshin Dinajpur-733127, West Bengal [PAN: AAAAU3193K] -Vs.- Income Tax Officer,.................................Respondent Ward-3(4), Balurghat, Presently, ITO, Verification Unit, Malda, Ministry of Finance, Deptt. Of Revenue, At Satyajit Manch, 3 rd Floor, Balurghat, P.O. Beltala Park, Dist. Dakshin Dinajpur-733103, West Bengal Appearances by: Shri Himangshu Kr. Ray, Shri Paban Kr. Ray & Smt. Sangita Paul, Advocate, appeared on behalf of the assesseee Smt. Ranu Bisws, Addl. CIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing : February 28, 2023 Date of pronouncing the order : May 09, 2023 O R D E R Per Dr. Manish Borad, Accountant Member:- This appeal at the instance of assessee for assessment year 2017-18 is directed against the order of ITA No. 781/KOL/2022 A.Y. 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited 2 ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 10.11.2022, which is arising out of the order under section 143(3) of the Act dated 19.12.2019 framed by Assessing Officer. 2. So far as Grounds No. 1 & 5 are concerned, they relate to the addition made by the ld. Assessing Officer for unexplained money under section 69A of the Act for the alleged cash deposits during demonetisation period by invoking the provisions of section 115BBE of the Act. 3. We, however, from the perusal of the impugned order, notice that the said addition has already been deleted by the ld. CIT(Appeals) in para 5.7.6 of the impugned order holding that there is no merit in the addition made of Rs.17,60,000/- and the same is hereby deleted. Since the addition of Rs.17,60,000/- made under section 69A of the Act has already been deleted by the ld. CIT(Appeals), wherein the ld. Assessing Officer has wrongly invoked the provisions of section 115BB of the Act, therefore, Grounds No. 1 & 5 become infructuous as already decided in favour of the assessee by the ld. CIT(Appeals). 4. Now remaining Ground No. 2 before us is only with regard to the addition of Rs.9,92,664/-. Facts in brief relating to this are that the assessee, which is a Cooperative Society, formed by its Tribal members and registered under the West Bengal ITA No. 781/KOL/2022 A.Y. 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited 3 Cooperative Societies Act, 1973 having Registration No. 69-WD of 1976, is engaged in providing Mini Bank service to its members, Sales of Fertilizer to its Tribal members as per bye-laws, guidelines of Government of West Bengal. In the return of income filed on 26.03.2018 for A.Y. 2017-18, deduction under section 80P has been claimed at Rs.65,844/-. During the course of complete scrutiny under CASS, ld. Assessing Officer noticed that in the Profit & Loss Account, the assessee has claimed miscellaneous income of Rs.9,92,664.28. The ld. Assessing Officer confronted the assessee to explain the nature of the said miscellaneous income, but could not get satisfactory reply, as a result of which, the ld. Assessing Officer treated it as income from other sources. The assessee carried the matter in appeal before the ld. CIT(Appeals), but it again failed to get any relief. Now the assessee is in appeal before the Tribunal. 5. Ld. Counsel for the assessee placed the break-up of miscellaneous income stating that all these income are part of regular activities of the Cooperative Society for which it is established for. 6. On the other hand, ld. D.R. supported the order of both the lower authorities. 7. We have heard the rival contentions and perused the relevant record placed before us. The miscellaneous income of ITA No. 781/KOL/2022 A.Y. 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited 4 Rs.9,92,664/- shown in the Profit & Loss Account has been treated by both the lower authorities as income from other sources. The break-up of the miscellaneous income of Rs.9,92,664/- as provided by the assessee during the course of hearing is reproduced below:- 8. Before us, it has been contended by the ld. Counsel for the assessee that all the above-referred heads of miscellaneous income are part and parcel of the regular activities carried out by the assessee-Society for its Tribal members and cannot be held to be the income from other sources. We have given thoughtful consideration and also gone through the audited financial statement provided by the assessee in the paper book running from pages 42 to 69. We notice that the assessee is working only for the Tribal members and the main purpose of the Society to provide Mini Bank service to its members, Sales of Fertilizer to its Tribal members etc. It is also discernable that various grants are received from the West Bengal State Government. Perusal of page 38 of the paper book also shows that the West Bengal Tribal ITA No. 781/KOL/2022 A.Y. 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited 5 Development Cooperative Corporation Limited, which is a Government of West Bengal Undertaking, is an Apex Body over the various types of Societies like that of assessee. Further we find that the miscellaneous income of Rs.9,92,664/- mainly constitutes grant received from the West Bengal Government for various activities as per its registered bye-laws. We do not find any reason to treat any of the element of miscellaneous income enumerated above as income from other sources. Since the alleged sum of Rs.9,92,664/- is the income earned by the Society for the purpose of its objects, the same is eligible for deduction under section 80P of the Act. We thus reverse the finding of ld. CIT(Appeals) and allow Grounds No. 2, 3 & 4 of the assessee directing the ld. Assessing Officer not to treat Rs.9,92,664/- as income from other sources and the same should be considered as income earned by the Society eligible for deduction under section 80P of the Act. Thus Grounds No. 2, 3 & 4 are allowed. 9. Ground No. 6 is general in nature, which does not call for recording of any reason. 10. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on May 9 th , 2023. Sd/- Sd/- (Rajpal Yadav) (Manish Borad) Vice-President(KZ) Accountant Member Kolkata, the 9 th day of May, 2023 ITA No. 781/KOL/2022 A.Y. 2017-2018 Udyan Large Size Multipurpose Cooperative Society Limited 6 Copies to :(1) Udyan Large Size Multipurpose Cooperative Society Limited, Vill. & P.O. Balapur, P.S. Tapan, Dist. Dakshin Dinajpur-733127, West Bengal (2) Income Tax Officer, Ward-3(4), Balurghat, Presently, ITO, Verification Unit, Malda, Ministry of Finance, Deptt. Of Revenue, At Satyajit Manch, 3 rd Floor, Balurghat, P.O. Beltala Park, Dist. Dakshin Dinajpur- 733103, West Bengal (3) Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.