Basaveshwar Gramin Bigarsheti Sahakari Pat Sanstha Maryajath Mangalwar Peth Jath, Sangli V. Income Tax Officer, Ward-2, Sangli, Sangli

ITA 826/PUN/2023

AI Insights

The case involves Basaveshwar Gramin Bigarsheti Sahakari Pat Sanstha Maryajath, a cooperative credit society, which appealed against the order of the CIT(A) that confirmed the disallowance of a deduction claimed under section 80P(2)(a)(i) of the Income-tax Act. The deduction was initially disallowed by the Assessing Officer due to the society's interest income from cooperative banks, which was considered not qualifying under the said section. The Tribunal referenced a prior decision (Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT) which clarified that cooperative societies are eligible for deductions under section 80P(2)(d) for interest income on investments/deposits with cooperative banks, despite the restrictions imposed by section 80P(4) effective from April 1, 2007.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124173 (ITAT-PUNE)
• Duration Of Justice: 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Appeal Filed On: 13-07-2023
• Other Referred Cases: Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2(19)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.826/PUN/2023 नधा रण वष / Assessment Year : 2020-21 Basaveshwar Gramin Bigarsheti Sahakari Pat Sanstha Maryajath, Mangalwar Peth Jath, Tal. Jath, Dist. Sangli – 416 404 Maharashtra PAN : AAAAB4864E Vs. ITO, Ward-2, Sangli Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee arises out of the order dated 22-05-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2020-21. 2. There is no appearance from the side of the assessee despite notice. I have heard the ld. DR and gone through the relevant material on record. I, therefore, proceed to dispose of the appeal on merits. Assessee by None Revenue by Shri Ajay D. Kulkarni Date of hearing 28-07-2023 Date of pronouncement 28-07-2023 ITA No.826/PUN/2023 2 3. Briefly stated, the facts of the case are that the assessee is a cooperative credit society engaged in the business of banking or providing credit facilities to its members. The assessee claimed deduction u/s.80P(2)(a)(i) under Chapter VIA of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) for the equal amount leading to total income at Nil. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee earned interest amounting to Rs.30,64,302/-. He worked out the proportionate interest income from cooperative banks forming part of business income at Rs.10,27,355/-, which in his opinion did not qualify for deduction u/s.80P(2)(a)(i). Eventually, the AO disallowed the deduction on this amount. The ld. CIT(A) countenanced the view point of the AO on this score, against which the assessee has approached the Tribunal. 4. The sole issue assailed in this appeal is no more res integra. The Pune Benches of the Tribunal in Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) has held, vide its order dated 07-01-2022, that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does ITA No.826/PUN/2023 3 not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co- operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessee is also a co-operative society, being, registered as such. 5. Respectfully following the decision of the Division Bench as discussed supra, I overturn the impugned order and direct to grant deduction u/s.80P of the Act on the said interest income. 6. In the result, the appeal is allowed. Order pronounced in the Open Court on 28 th July, 2023. Sd/- ( R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 28 th July, 2023 सतीश ITA No.826/PUN/2023 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. 5. The Pr.CIT concerned DR, ITAT, ‘SMC’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 28-07-2023 Sr.PS 2. Draft placed before author 28-07-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *