SHRI GAJANAN NAGARI SAHAKARI PATSANSTHA MARYADIT,SATARA V. ITO, WARD-1(1), KOLHAPUR, KOLHAPUR

ITA 2077/PUN/2025

AI Insights

The case involves Shri Gajanan Nagari Sahakari Patsanstha Maryadit, a cooperative credit society, which appealed against the order of the Income Tax Officer (ITO) for the assessment year 2020-21. The ITO had added Rs. 2,14,62,523 as unexplained unsecured loans and disallowed deductions under Section 80P totaling Rs. 73,93,111. The CIT(A) partly allowed the appeal, remanding the issue of the unsecured loans back to the ITO for verification of additional evidence, and allowed the deduction of Rs. 10,33,487 but confirmed the denial of Rs. 63,53,594 related to interest income from other cooperative banks. The Tribunal upheld the CIT(A)'s decision to remand the issue of unsecured loans and the deduction under Section 80P for interest income from other cooperative banks back to the ITO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792116 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2020-2021
• Appeal Filed On: 03-09-2025
• Other Referred Cases: Totagars Cooperative Sale Society Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD PAWAR
• Keywords: Additional evidence; Unexplained cash credit; Rule of consistency; Co-operative Credit Society
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2077/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2020-21 Shri Gajanan Nagari Sahakari Patsanstha Maryadit, Malakpur, Tal- Karad, Dist.- Satara, Karad- 415110. PAN : AABAS8429B Vs. ITO, Ward-1(1), Kolhapur. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 04.07.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2020-21. 2. The appellant has raised the following grounds of appeal :- “1) GROUND NO. 1- Addition of Rs. 2,14,62,523/- as Unexplained Cash Credit (U/s 68) On the facts and circumstances of the case and in law, the learned AO erred in making an addition of Rs. 2,14,62,523/- on account of unexplained unsecured loans without considering the nature of deposits. Assessee by : None Revenue by : Shri Vinod Pawar Date of hearing : 28.10.2025 Date of pronouncement : 09.12.2025 Printed from counselvise.com ITA No.2077/PUN/2025 2 1.1) The appellant is a Co-operative Credit Society registered under the Maharashtra Co-operative Societies Act. Accepting deposits from members and providing loans is the regular business of the society. The deposits are part of the core operational funds and not unexplained cash credits. The learned AO wrongly considered the increase in deposits as unexplained unsecured loans and made an addition of Rs. 2,14,62,523/-. Prayer: The appellant prays that the addition of Rs. 2,14,62,523/- made by the learned AO be deleted as it pertains to regular business deposits. 2) GROUND NO. 2 - Disallowance of Deduction U/s 80P of Rs.73,93,111/- On the facts and circumstances of the case, the learned AO erred in disallowing the entire deduction of Rs. 73,93,111/- claimed u/s 80P without properly considering the nature of income and the evidences furnished. 2.1) The appellant earned interest income of Rs. 63,53,594/- from investments in Co-operative Banks and Societies, which is eligible for deduction u/s 80P(2)(a)(i) as well as 80P(2)(d). However, the AO not only disallowed this deduction but also wrongly included net profit of Rs. 10,33,487/- earned from loans to members. Prayer: The appellant prays that the disallowance of deduction u/s 80P(2)(d) and 80P(2)(a)(i) amounting to Rs. 73,93,111/- be quashed and the rightful deduction be allowed. 3) GROUND NO. 3 Violation of Principle of equality (Art 14 of Constitution of India) On the facts and circumstances of the case, the learned AO erred in Not following Principle of equality before law as enriched in constitution of India, For AY 2018-19 in case our credit co operative society Hon CIT appeal has allowed claim of 80P, But for AY 2020-21 in case of same fact, same co operative society Hon. AO failed to give justice Prayer: The appellant prays that the disallowance of deduction u/s 80P(2)(d) and 80P(2)(a)(i) amounting to Rs. 73,93,111/- be Printed from counselvise.com ITA No.2077/PUN/2025 3 quashed and the rightful deduction be allowed following principle of equality before law 4) GROUND NO. 4 The appellant craves leave to add, alter, amend, or delete any of the above grounds of appeal.” 3. Facts of the case, in brief, are that the assessee is a primary credit co-operative society engaged in the activity of providing credit facilities to its members and also accepting deposits from them. The return of income was furnished on 14.01.2021 by declaring Nil income after claiming deduction of Rs.10,33,487/- u/s 80P(2)(a)(i) and deduction of Rs.63,59,624/- u/s 80P(2)(d) of the IT Act. The case was selected for scrutiny and statutory notices were issued to the assessee asking for a specific information with regard to deduction claimed by the assessee u/s 80P(2)(d) of the IT Act and also asked the reason for increase in unsecured loan of Rs.2,14,62,523/-. The assessee furnished part of the information and did not furnished complete information desired by the Assessing Officer. The Assessing Officer relied on the judgement passed by Hon'ble Karnataka High Court in the case of Totagars Cooperative Sale Society Ltd. and denied the claim of deduction of Rs.73,93,111/- made by the assessee u/s 80P(2)(a)(i) (Rs.10,33,487) & 80P(2)(d) (Rs.63,59,624) of the IT Act and also added an Printed from counselvise.com ITA No.2077/PUN/2025 4 amount of Rs.2,14,62,523/- which represented increase in unsecured loans. Accordingly, vide order dated 23.09.2022 the Assessing Officer completed the assessment u/s 143(3) r.w.s. 144B of the IT Act by determining total income at Rs.2,88,55,634/- as against Nil income returned by the assessee. The above assessed income includes addition on account of disallowance of deduction of Rs.10,33,487/- u/s 80P(2)(a)(i) of the IT Act and disallowance of deduction of Rs.63,59,624/- u/s 80P(2)(d) of the IT Act and also addition of Rs 2,14,62,523/- u/s 68 of the IT Act on account of increase in unsecured loans. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and additional evidences furnished by the assessee, Ld. CIT(A)/NFAC partly allowed the appeal. In its order, Ld. CIT(A)/NFAC while dealing with ground no.1 wherein addition u/s 68 of the IT Act of Rs.2,14,62,523/- on account of increase in unsecured loan was challenged, admitted certain additional evidences furnished by the assessee which could not be furnished before the Assessing Officer and remanded the matter back to the Assessing Officer for necessary verification and fresh decision on the above issue in the light of additional evidences. With regard to Printed from counselvise.com ITA No.2077/PUN/2025 5 other ground regarding allowance of deduction u/s 80P(2)(a)(i) and 80P(2)(d) of the IT Act, Ld. CIT(A)/NFAC directed the Assessing Officer to allow deduction of Rs.10,33,487/- claimed by the assessee u/s 80P(2)(a)(i) of the IT Act and confirmed denial of deduction of Rs.63,53,594/- as claimed by the assessee u/s 80P(2)(d) of the IT Act. 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. When the appeal was called for hearing neither anybody attended nor any application for adjournment was furnished by the assessee despite due service of notice of hearing upon the assessee. Therefore, we proceed to decide the appeal on merits of the case after hearing Ld. DR and also on the basis of material available on record. 7. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same. 8. We have heard Ld. DR and perused the material available on record. In this regard, we find that the assessee has mainly challenged two additions i.e. addition of Rs.2,14,62,523/- and addition of Rs.73,93,111/-. Printed from counselvise.com ITA No.2077/PUN/2025 6 9. With regard to addition of Rs.2,14,62,523/- we find that the assessee could not furnish the whole of the information desired by the Assessing Officer therefore the addition of Rs.2,14,62,523/- was made due to increase in unsecured loans. In first appeal proceedings, Ld. CIT(A)/NFAC admitted additional evidences filed by the assessee and set-aside the order on the issue of addition of Rs.2,14,62,523/- and remanded the matter back to the file of the Assessing Officer to decide the issue of addition of Rs.2,14,62,523/- afresh in the light of additional evidences. We do not find any error in the order of Ld. CIT(A)/NFAC on this issue since the assessee himself could not produce the requisite information and details before the Assessing Officer and therefore filed certain additional evidences which needs verification at the level of the Assessing Officer. Accordingly, we confirm the order of Ld. CIT(A)/NFAC wherein the issue of addition of Rs.2,14,62,523/- was restored back to the file of the Assessing Officer to decide the above issue afresh in the light of additional evidences. Needless to say that the Assessing Officer will decide the issue afresh as per fact and law and after providing reasonable opportunity of hearing to the assessee. Printed from counselvise.com ITA No.2077/PUN/2025 7 10. With regard to addition of Rs.73,93,111/- interest income we find that this amount includes Rs.10,33,487/- pertaining to interest income earned from members of the society and interest income of Rs.63,53,594/- earned from other cooperative banks. 11. With regard to interest income of Rs.10,33,487/- earned from members of the society Ld. CIT(A)/NFAC has already directed the Assessing Officer to allow deduction u/s 80P(2)(a)(i) of the IT Act. Accordingly, we do not find any error in the order of Ld. CIT(A)/NFAC with regard to addition of Rs.10,33,487/- wherein relief has already been allowed to the assessee. 12. Regarding addition towards interest income of Rs.63,53,594/- earned from other banks and other cooperative societies we find that Ld. CIT(A)/NFAC has confirmed the addition and denied the deduction u/s 80P(2)(d) of the IT Act. In this regard, we find that the assessee has also produced copy of first appellate order passed by Ld. CIT(A)/NFAC in its own case for assessment year 2018-19 wherein the claim of deduction u/s 80P(2)(d) of the IT Act was allowed to the assessee with regard to interest income earned by the assessee from its investments with other cooperative banks which are cooperative societies. We further find that Ld. CIT(A)/NFAC in the above appellate order of assessment year 2018-19 in the case of Printed from counselvise.com ITA No.2077/PUN/2025 8 assessee itself has already allowed the deduction u/s 80P(2)(d) of the IT Act with regard to interest income earned from other cooperative banks by placing reliance on the decisions passed by coordinate bench of this Tribunal. Therefore, we find some force in the grounds raised by the assessee that rule of consistency has not been followed although the facts of the instant case in hand and that of assessment year 2018-19 remains same. However, at the same time from the perusal of details of investments furnished by the assessee before Ld. CIT(A)/NFAC we find that name of Bandhan Bank is also appearing in the list (Investment Rs.11,36,091/-) which is not a co-operative bank and the bifurcations of interest income is not provided by the assessee. 13. Considering the totality of the facts of the case, & also in the light of the fact that Ld. CIT(A)/NFAC has already remanded the issue of addition of Rs.2,14,62,523/- u/s 68 of the IT Act to the file of the Assessing Officer to decide the issue afresh, we also deem it appropriate to set-aside the issue of deduction u/s 80P(2)(d) of the IT Act of interest income earned from cooperative banks to the file of the Assessing Officer to decide the issue afresh as per fact and law in the light of decision already passed in the case of assessee for assessment year 2018-19 after providing reasonable opportunity of Printed from counselvise.com ITA No.2077/PUN/2025 9 hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer in this regard and also directed to produce the submission documents additional evidences and case laws in support of its contentions without taking any adjournment under any pretext otherwise the Assessing Officer shall be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes. 14. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 09th day of December, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 09th December, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr.CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "