SHRI SAHAJANAND CO. OP. CREDIT SOCIETY LTD.,VADODARA vs. THE DY. CIT, CIRCLE-3(1), VADODARA

This appeal filed by the Assessee is directed against the order of the Commissioner of Income-Tax (Appeals) (‘hereinafter called CIT(A)’) order no. CIT(A)-Vadodara-3/10260/16-17 order dated 31/07/2017 arising out of 2 . A.Y. 2014-15 assessment order dated 17/10/2016. Assessee has taken following grounds of appeal: 1.The learned Commissioner of Income Tax (Appeals) -3, Vadodara [‘’the CIT(A)’’] erred in fact and in law in confirming the action of Dy. Commissioner of Income Tax, Circle-3(1) Baroda [“the AO’’] in not allowing the deduction u/s 80P(2)(a)(i) of Rs. 58,10,410/- claimed by the appellant. 2.The learned CIT(A) erred in fact and in law in confirming the action of the AO holding that the interest earned by the appellant from deposits made with nationalized banks is assessable u/s 56 and not eligible for deduction u/s 80P(2)(a)(i) as it is not related to the business of providing credit facilities to the members of the appellant. 3.The learned CIT(A) erred in fact and in law in ignoring the provisions of section 80(2)(a)(i) with clearly provides that the deduction is available to a Co Operative society which is engaged in carrying on the business of banking or providing credit facilities to its members.

Facts of the case are that during the course of assessment proceedings, it is seen on verification of the details filed by the assessee that assessee had earned interest income totaling to Rs. 62,49,236/- from Nationalized Bank & Co.op. Bank. It is also seen from the return of income filed that the assessee has claimed deduction under chapter-VI-A of the Income Tax Act i.e. u/s 80P(2)(a)(i). The said interest income of Rs. 62,49,236/- is earned from surplus funds invested in bank deposits/Savings Bank account with the Nationalized Bank.

Thereafter assessee preferred first statutory appeal before the Ld. CIT(A) who confirmed the order of the Ld. Assessing Officer.

Now assessee has preferred second statutory appeal before us. At the outset, Ld. A.R. Mrs. Amrin Pathan stated that in for Assessment Year 2013-14, this bench has decided appeal against the assessee for similar facts and circumstance and on 21/12/2017 and before us in subsequent assessment year i.e. 2014-15 and she requested that this case may kindly be set aside to the file of the Assessing Officer for netting off interest income earned by the assesseee. In our considered opinion, her prayer seems to be genuine and whatever expenditure assessee has made in order to earn interest income same should be allowed.

In the result, appeal field by the Assessee is allowed for statistical purposes.