BHARAT COOPERATIVE CREDIT SOCIETY LIMITED,BELAGAVI vs. INCOME TAX OFFICER WARD 4, BELAGAVI

Because, the Assessing Officer made additions wrongly under section 68 of the Income Tax Act, for cash credits based on deposits in bank, without going through the books of accounts maintained by the Appellant.

Because the Appellant has deposited Rs.20,94,736/- cash collected from members of the society during the demonetisation period and deposited the same into the bank account does not amount to unexplained cash credit under section 68 of the income tax act, since the appellant has maintained the details of such depositors hence additions made under section 68 is erroneous.

Because, the learned Commissioner of Income Tax (Appeals) upheld the additions under section 68 of the Income Tax Act, despite appellants submissions with details of depositors from whom cash is collected and deposited into the bank accounts, thereby deprived the natural justice.

The appellant craves leave to add and or alter any of the grounds of appeal before or at the time of hearing.

There is delay of 441 days as pointed out by the Registry in filing of this appeal before us. In this regard we have heard Ld. Counsels from both the sides and perused the application filed by the assessee for condonation of delay. We are satisfied with the reasons mentioned by the assessee in delay condonation application which is duly supported by an affidavit that the assessee was prevented by reasonable cause in not filing the appeal within the prescribed time limit. Accordingly we deem it appropriate to condone the delay and proceed to adjudicate the appeal.

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 and has furnished its return of income on 07.11.2017 by declaring an income of Rs. NIL after claiming deduction of Rs. 15,18,315/- u/s 80P of the IT Act. During the course of assessment proceedings the Assessing Officer found that the assessee has deposited Rs. 23,94,500/- SBN i.e. specific bank notes during demonetization in its bank accounts whereas the assessee was only having

Being aggrieved with the above assessment order the assessee preferred an appeal before Ld. CIT(A).

Being not fully satisfied with the reply of the assessee Ld. CIT(A) confirmed the addition of Rs. 20,94,736/- and partly allowed the appeal by deleting other additions of Rs. 8,22,850/-. It is the above order against which the assessee is in appeal before this Tribunal.

We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book and application for additional evidences filed by the assessee. In this regard we find that in all the grounds the assessee credit co-operative society has challenged the addition of Rs. 20,94,736/- being cash deposited in bank accounts during demonetization as unexplained cash credit u/s 68 r.w.s. 115BBE of the IT 4 Act and in this regard relied on following decisions passed by co-ordinate benches of this Tribunal in the case of various credit cooperative societies, wherein addition of cash deposited in the shape of SBN during demonetization period was deleted :- 1)Merchants Credit Co-operative Society Ltd., Kerur, Dist. Bagalkot Vs. ITO Ward 1, Bagalkot, ITA No. 329/Bang/2023 pronounced on 24.08.2023. 2)Shrijeet Finance (P.) Ltd. Vs Assistant Commissioner of Income Tax, ITA 439(PUN) of 2022 pronounced on 22/04/2024. 3)Shree Durgamata Multipurpose Coop Society Limited, Nandgad, Dist. Belagavi Vs. ITO, Ward-3, Belagaum, Karnataka, ITA No. 18/PAN/2024 [E- APPEAL] pronounced on 28.06.2024 4)Sri Bhageeratha Pattina Sahakara Sangha Niyamitha, Hosadurga, Karnataka Vs. ITO Ward-3, Davanagere, ITA No. 646/Bang/2021 pronounced on 18.02.2022. 8. In this regard we find that Ld. CIT(A) has confirmed the above addition on the ground that the assessee has failed to prove the source of cash deposits of Rs. 20,94,736/-. In this regard we find that the assessee has furnished additional evidences before us to prove the cash deposit made during the demonetization period and requested to admit the same for adjudication. By accepting the request we admit the additional evidences. According to us these additional evidences needs verification at the level of the Assessing Officer therefore we deem it appropriate to set aside the order passed by Ld. CIT(A) with regard to the limited issue of addition of Rs. 20,94,736/- and restore the limited issue of addition of Rs. 20,94,736/- back to the file of the Assessing Officer with a direction to decide the issue afresh and as per fact and law in the light of various

In result the appeal filed by the assessee is allowed for statistical purposes.

The Pr. CIT concerned. 4. पवभागीय प्रनिनिधि, आयकर अपीलीय अधिकरण, "एस एम सी "बेंच, पणजी / DR, ITAT, "SMC" Bench, Panaji. 5. गार्ा फाइल / Guard File. आदेशािुसार / BY ORDER,