Swastik Co Op Credit Society, Ahmedabad V. The ITO, Ward-1(1)(1), Ahmedabad

ITA 950/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6829 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 29-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V.K. SINGH
• Section: 80P; 72

Judgement Text

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD – BENCH ‘SMC’ BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT आयकर अपील सं./ ITA No. 950/Ahd/2019 नधा रण वष /Assessment Year: 2015-16 Swastik Co-op Credit Society 38, Pankaj Society Opp: Ramji Mandir Road Bhatha Paldi Ahmedabad 380 007. PAN : AAFAS 4085 F Vs ITO, Ward-1(1)(1) Ahmedabad. अपीलाथ / (Appellant) यथ / (Respondent) Assessee by : None Revenue by : Shri V.K. Singh, Sr.DR स ु नवाई क तार ख/Date of Hearing : 26/11/2021 घोषणा क तार ख /Date of Pronouncement : 08/12/2021 O R D E R Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-1, Ahmedabad dated 29.3.2019 passed for the Asstt.Year 2015- 16. 2. In the first ground of appeal, the assessee has challenged disallowance of deduction of Rs.7,39,992/-, under section 80P(2)(d) of the Income Tax Act, 1961. 3. Brief facts of the case are that the assessee is a cooperative credit society providing credit facilities to its members. It has filed return of income on 25.3.2017 declaring total income at NIL. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the ITA No.950/Ahd/2019 - 2 - accounts, it revealed to the AO that the assessee has earned interest income at Rs.7,39,992/- from fixed deposits with cooperative bank. The assessee claimed the same as allowable deduction under section 80P of the Act. The ld.AO accordingly show caused as to why the same should be disallowed on the ground that interest income was earned from nationalized bank. Assessee submitted that the interest income earned on fixed deposits with other cooperative bank was an allowable deduction under section 80P(2)(d) of the Act. Assessee has also averred that since the assessee has incurred interest expenditure of Rs.4,90,820/-, the net interest income earned by it was only Rs.2,49,172/- that too was allowable deduction in accordance with the law. However, the ld.AO did not accept explanation of the assessee. He was of the view that since Rajkot Nagarik Sahakari Bank Ltd. is a scheduled bank, and doing parallel banking activities, income earned from investment in such bank did not qualify for deduction under section 80P(2)(d) of the Act. He accordingly disallowed claim of the assessee. In appeal, the ld.CIT(A) summarily confirmed action of the ld.AO and upheld his order. Further aggrieved, the assessee is now before the Tribunal. 4. Before me none appeared on behalf of the assessee. I have heard the ld.DR, who supported orders of the Revenue authorities. 5. On due consideration of the above facts, I find that the interest income earned by a cooperative society from the deposits made with other cooperative bank/society falls within section 80P(2)(d) and therefore eligible for deduction. For this proposition, I find support from judgment of Hon'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd. Vs. ACIT (2016) 72 taxmann.com 169 wherein it has ITA No.950/Ahd/2019 - 3 - been held that assessee co-operative society is eligible for deduction under section 80P(2)(d) of the Act in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. Further, the Co-ordinate Bench of Rajkot Tribunal in Surendarnagar District Co-operative Milk Producer Union Ltd. v. Dy. CIT [2019] 111 taxmann.com 69) also held that the assessee co-operative society could not claim benefit under section 80P(2)(d) in respect of interest earned by it from deposits made with nationalized/private banks, however, the said benefit was available in respect of interest earned on deposits made with co-operative bank. Respectfully following the above two decisions, I allow ground no.1 of the assessee. 6. So far as ground no.2 is concerned, since claim of the assessee under section 80P(2)(d) of the Act has been allowed on gross basis, the ground no.2 does not require separate adjudication. 7. In the result, appeal of the assessee is allowed. Pronounced in the Open Court on 8 th December, 2021. Sd/- (RAJPAL YADAV) VICE-PRESIDENT Ahmedabad; Dated, 08/12/2021