SHREE UMIYA CO-OP. CREDIT SOCIETY LTD.,MEHSANA V. THE DY.CIT, CIRCLE GANDHINAGAR, GANDHINAGAR

ITA 56/AHD/2025

AI Insights

The case involves Shree Umiya Co-op. Credit Society Ltd., which appealed against the orders of the CIT(A), National Faceless Appeal Centre, Delhi, for the Assessment Years 2016-17 and 2020-21. The primary issue was the disallowance of deductions claimed under Section 80P(2)(d) of the Income Tax Act, 1961, for interest income earned from Co-operative Banks. The Tribunal found that the interest income from Mehsana Urban Co-operative Bank Limited for A.Y. 2016-17 was eligible for deduction under Section 80P(2)(d), thus allowing the appeal for that year. For A.Y. 2020-21, due to insufficient details provided by the assessee regarding the Co-operative Banks, the matter was remanded back for further verification.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470403 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Other Referred Cases: Katlary Kariyana Merchant Sahkari Sarafi Mandali Limited vs ACIT, Surat Vankar Sahakari Sangh Limited vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHAKAR VERMA
• Assessee Lawyers: BIREN SHAH; GULAB M. THAKOR; ARS
• Keywords: TDS; Co-operative Credit Society
• Section: 250; 194A; 139; 72

Judgement Text

"ITA Nos.56 & 57/Ahd/2025 Assessment Years: 2016-17 & 2020-21 Shree Umiya Co-op. Credit Society Ltd vs/ DCIT Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA Nos.56 & 57/Ahd/2025 Assessment Years: 2016-17 & 2020-21 respectively Shree Umiya Co-op. Credit Society Limited, 2, Main Bazar, Kherva Mehsana, Mehsana – 382 711, Gujarat. [PAN – AACAS 4790 C] Vs. The Deputy Commissioner of Income Tax, Circle, Gandhinagar, IT-Office, Udyog Bhawan, Sector-11, Gandhinagar -382 010, Gujarat. (Appellant) (Respondent) Assessee by Shri Biren Shah & Gulab M. Thakor, ARs Revenue by Shri Sudhakar Verma, Sr. DR Date of Hearing 10.03.2025 Date of Pronouncement 12.03.2025 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: These two appeals are filed by the Assessee against two separate orders, both dated 08.11.2024, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Years 2016-17 & 2020-21. 2. As the issue involved in these appeals are common and the grounds raised are also identical in both these appeals, and hence, grounds raised in ITA No.56/Ahd/2025 for A.Y. 2016-17 are being reproduced as under: “Grounds of Appeal (Without prejudice to each other) 1. In law and on the facts and in the circumstances of the case, the order u/s 250 of the Act passed by the Ld. CIT (A) is arbitrary, erroneous, contrary to the provisions of law and on facts. 2. In law and in the facts and circumstances of the case of the Appellant, the order u/s.250 of the Income Tax Act, 1961 passed by Ld. CIT(A) is ITA Nos.56 & 57/Ahd/2025 Assessment Years: 2016-17 & 2020-21 Shree Umiya Co-op. Credit Society Ltd vs/ DCIT Page 2 of 4 without considering the facts of the case and responses filed by the appellant, is bad in law and deserves to be cancelled. 3. In law and in the facts and circumstances of the case of the Appellant, the Ld. CIT(A) has grossly erred in upholding disallowance of deduction claimed u/s.80(P)(2)(d) of the Act amounting Rs.23,03,488/- without appreciating the fact that any income received from the investment held with a Cooperative Bank is eligible for deduction under section 80P(2)(d) of the Act. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or at the time of hearing of the appeal.” 3. The assessee is a Co-operative Credit Society registered under the Gujarat State Co-operative Societies Act and engaged in the business of accepting deposits and providing credit facilities to its members. The assessee has not field return of income under Section 139 of the Income Tax Act, 1961 for the relevant Assessment Year (A.Y.) 2016-17. As per the information, it was noted that the assessee made transactions paid/received in cash, time deposit of Rs.1,00,000/- and above and as per TDS statement, TDS on interest other than interest on securities, under Section 194A, aggregating gross amount to Rs.3,58,97,486/- for A.Y. 2016-17. The assessee made cash deposits in Mehsana Urban Co-operative Bank Limited amounting to Rs.80,50,000/-, cash deposited in Bank of Baroda amounting to Rs.1,12,60,000/-, time deposit in The Surat Mercantile Bank amounting to Rs.83,48,908/- and cash transactions found in The Surat Mercantile Bank amounting to Rs.80,00,000/-. As per TDS statement under Section 194A interest received other than interest on securities was Rs.2,38,578/-. The Assessing Officer observed that the interest income earned from these Institutions was claimed for deduction under Section 80P(2)(d) of the Act and thus the Assessing Officer disallowed Rs.23,03,488/- earned as interest income. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the interest earned from Mehsana Urban Co- operative Bank Limited has to be termed as interest received from Co-operative Bank which is eligible for deduction under Section 80P(2)(d) of the Act. The bifurcation of the interest income earned and claimed by the assessee is as follows:- ITA Nos.56 & 57/Ahd/2025 Assessment Years: 2016-17 & 2020-21 Shree Umiya Co-op. Credit Society Ltd vs/ DCIT Page 3 of 4 Name of Bank from whom interest income is earned Amount (Rs.) Earned Amount (Rs.) Claimed as Deduction The Mehsana District Central Co-operative Bank Limited 16,25,393/- 23,03,488/- The Mehsana Urban Co-operative Bank Limited 10,40,803/- Total 26,66,196/- 23,03,488/- The Ld. AR relied upon the decision of Hon’ble jurisdictional High Court in the case of Katlary Kariyana Merchant Sahkari Sarafi Mandali Limited vs ACIT (order dated 04.01.2022, which was modified in M.A. dated 26.04.2024 in C/SCA/20585/2019) and also decision of Hon’ble Gujarat High Court in the case of Surat Vankar Sahakari Sangh Limited vs. ACIT (2016) 72 taxmann.com 169. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The interest earned on Fixed Deposits from The Mehsana District Central Co-operative Bank and that of The Mehsana Urban Co-operative Bank Limited totalling to Rs.26,66,196/- and the deduction claimed amounting to Rs.23,03,488/- by the assessee is derived from the Co-operative Bank itself and as the same is earned from the Co-operative Bank which is Co-operative Society as per the Co-operative Societies Act is eligible for deduction under Section 80P(2)(d) of the Act. Thus, the assessee is eligible for deduction under Section 80P(2)(d) of the Act. Thus, the appeal in ITA No.56/Ahd/2025 for A.Y. 2016-17 is allowed. 7. As relates to ITA No.57/Ahd/2025 for A.Y. 2020-21, the assessee has earned interest income from Co-operative Banks and claimed deduction of Rs.42,39,344/- under Section 80P(2)(d) of the Act. As regards the details of Co-operative Banks, from the perusal of the records, it appears that the assessee has not given the details of which Co-operative Bank the assessee has earned the interest income and, therefore, the matter is remanded back to the file of the Assessing Officer for verifying the component of from which Co-operative Bank the assessee has earned interest income. The assessee be given opportunity of hearing. Hence, ITA No.57/Ahd/2025 for A.Y. 2020-21 is partly allowed for statistical purpose. ITA Nos.56 & 57/Ahd/2025 Assessment Years: 2016-17 & 2020-21 Shree Umiya Co-op. Credit Society Ltd vs/ DCIT Page 4 of 4 8. In the result, ITA No.56/Ahd/2025 for A.Y. 2016-17 is allowed and ITA No.57/Ahd/2025 for A.Y. 2020-21 is partly allowed for statistical purpose. Order pronounced in the open Court on this 12th March, 2025. Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) Vice President Judicial Member Ahmedabad, the 12th March, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "