SHAHPURA GRAM SEWA SAHAKARI SAMITI LTD.,JAIPUR vs. INCOME TAX OFFICER, WARD-4-1, JAIPUR

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ITA 767/JPR/2019Status: DisposedITAT Jaipur15 October 2020AY 2015-1612 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the interest received by the assessee from Jaipur Central Cooperative Bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961. The Tribunal found no substance in the revenue's objection to the production of the certificate from the Registrar of Cooperative Societies, noting it was a document in the public domain. The Tribunal relied on the certificate confirming Jaipur Central Cooperative Bank as a registered cooperative society. It further cited decisions of the Coordinate Bench in ITO vs. Shree Keshorai Patan Sahakari Sugar Mill, Bundi, and the Hon'ble Karnataka High Court in PCIT and Another vs. Totagars Co-operative Sale Society, which held that a cooperative bank is considered a cooperative society for the purpose of Section 80P(2)(d). Therefore, the interest income derived from such a cooperative bank is eligible for deduction. The disallowance and addition made by the AO and confirmed by the CIT(A) were deleted. The appeal was allowed.

What were the facts?

The assessee, Shahpura Gram Seva Sahakari Samiti Ltd., filed an appeal against the order of the CIT(A)-2, Jaipur for Assessment Year 2015-16. The appeal challenged the disallowance of deduction under Section 80P(2)(a)(i) on interest received from Jaipur Central Cooperative Bank. The Assessing Officer (AO) disallowed the deduction of Rs. 2,51,866/-, allowing only Rs. 50,000/- under Section 80P(2)(C)(ii). The assessee contended that as a primary agricultural credit co-operative society, its entire income should be exempt under Section 80P(2)(a)(i). The CIT(A) confirmed the AO's disallowance, stating that the interest was received on an FDR with a cooperative bank and not from credit facilities to members, and that the assessee failed to prove the Jaipur Central Cooperative Bank was a cooperative society. The assessee then produced a certificate from the Registrar of Cooperative Societies to prove the bank's status.

What were the issues?

1. Whether the interest received by the assessee from Jaipur Central Cooperative Bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961, as a primary agricultural credit co-operative society, when the CIT(A) denied it for lack of proof that the bank is a cooperative society. Assessee's Contention: The assessee argued that the interest received from Jaipur Central Cooperative Bank is eligible for deduction under Section 80P(2)(d) as the bank is a registered cooperative society, evidenced by a certificate from the Registrar of Cooperative Societies. They relied on various Tribunal decisions. Revenue's Contention: The revenue objected to the production of the certificate from the Registrar of Cooperative Societies at this stage, considering it as additional evidence not produced before the lower authorities. They relied on the orders of the AO and CIT(A).

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 80P(2)(C)(ii),Section 80P(2)(d),Section 80P(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCH VC ‘SMC’, JAIPUR

Before: SHRI VIJAY PAL RAO

For Appellant: Shri Brijesh Agarwal
Hearing: 14.10.2020Pronounced: 15/10/2020
1.

The Appellant- Shahpura Gram Seva Sahakari Samiti Ltd., Shahpura, Jaipur.

2.

The Respondent – The ITO Ward 4(1), Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 767/JP/2019) vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

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