Appeal details
Counselvise Citation
[2024] 130 COUNSELVISE.COM (IT) 5601 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
18-08-2024
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
C
Next Hearing Date
11-07-2024
Assessment Year
2018-2019
Appeal Filed On
30-06-2024
Judgement Text
MP No.26/Bang/2024 Surabhi Souharda Credit Co-operative Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER MP No.26/Bang/2024 (Arising out of ITA No.777/Bang/2024 Assessment Year: 2018-19 Surabhi Souharda Credit Co- operative Limited No.2, Surabhi Sahakari Sadana 13 th Cross, Banashankari 2 nd Stage Bengaluru 560 070 PAN NO : AAFAS0815D Vs. ITO Ward-7(2)(5) Bangalore APPELLANT RESPONDENT Appellant by : Sri Kiran Kumar, A.R. Respondent by : Shri V. Parithivel, D.R. Date of Hearing : 12.07.2024 Date of Pronouncement : 19.08.2024 O R D E R PER SOUNDARARAJAN K., JUDICIAL MEMBER: The present miscellaneous application filed by the assessee arising out of order dated 3.7.2024 passed by this Tribunal in the above referred appeal. 2. The ld. A.R. submitted that the assessee had statutorily required to deposit the monies with the other Co-operative banks as per the section 53(7)(a) of the Karnataka Souharda Sahakari Act, 1997. The ld. A.R. also invited our attention to the guidelines issued by the Karnataka State Federal Co-operative Society Ltd. Dated 7.2.2008, which reads as follows: “The total amount of loans and advances at any given point of time shall not exceed 80% of the deposits and share capital and reserve fund. The Co-operative shall invest outside its business, 20% of the deposits as liquid assets as per sec.18 of the Act.” MP No.26/Bang/2024 Surabhi Souharda Credit Co-operative Limited, Bangalore Page 2 of 3 2.1 The ld. A.R. further submitted that in view of the above said guidelines and the provisions, the assessee was statutorily required to deposit in banks and therefore the interest arising from such investments is attributable to the business of the assessee and falls under the head profit & gains of business or profession. The ld. A.R. also relied on the CBDT Circular No.18/2015 in support of his arguments. 2.2 The ld. A.R. also relied on the various orders of this Tribunal and also made alternative plea that the interest received from the cooperative banks are eligible for deduction u/s 80P(2)(d) of the Act. 3. The ld DR relied on the order of the Tribunal dated 24.06.2024 and prayed to dismiss the M.A. 4. We consider the arguments and the reason for filing this MA and satisfied ourself that the M.A can be decided on merits. 4.1 The assessee had submitted that as per the statutory requirement, they have to deposit 20% of the deposits as liquid assets. If there is any violation the authorities under the State Act would ensure action against the society. It is the further contention of the assessee that they had deposited pursuant to the above said compulsion and therefore entitled for deduction u/s 80 P of the Act. This contention was not raised by the assessee before the AO and therefore, the AO has no occasion to consider the same. We therefore, remit the issue to the file of AO to consider the plea raised by the assessee in this miscellaneous petition and decide the issue afresh after verifying the books of accounts and other documents to confirm whether the deposits were made pursuant to the statutory requirement or not. If the assessee was not able to establish their case by producing the necessary details before the AO, it is open to the AO to make the assessment in accordance with law. We ordered accordingly in respect of ground No 1 4.2 In respect of Gr 2, We find that the assessee had alternatively claimed deduction u/s 80P(2)(d) of the Act. We direct the AO to MP No.26/Bang/2024 Surabhi Souharda Credit Co-operative Limited, Bangalore Page 3 of 3 consider this claim if the earlier ground was not available to the assessee. Accordingly, we direct the AO to verify whether interest is received by the assessee out of investments made with Cooperative Societies. If the assessee earns interest income out of investments with co-operative society, as observed by Hon’ble Supreme Court in the case of Kerala State Cooperative Agricultural and Rural Development Bank Ltd in civil appeal No.10069 of 2016 dated 14.09.2023, the same is entitled to deduction u/s 80P(2)(d) of the Act. 4.3 We also made it clear that if the interest earned by the assessee from the banks are considered under the head “Income from other sources” relief to be granted to the assessee u/s 57 of the Act in accordance with law. With the above observations, we remit the matter to the file of AO to decide the impugned issue afresh after giving opportunity of hearing to the assessee. 5. In the result, MA filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 19 th Aug, 2024 Sd/- (Chandra Poojari) Judicial Member Sd/- (Soundararajan K.) Judicial Member Bangalore, Dated 19 th Aug, 2024. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore.
