INCOME TAX OFFICER,WARD-1, HOSPET vs. GAYATRI PATTINA SOUHARDA SAHAKARI SANGHA NIYAMITHA, HOSPET, HOSPET

ITA 1078/BANG/2024Status: DisposedITAT Bangalore17 July 2025AY 2017-1821 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that interest earned on investments of surplus funds in banks, even if not cooperative societies, is not eligible for deduction under Section 80P(2)(d). However, the Tribunal also considered the eligibility for deduction under Section 80P(2)(a)(i) for income derived from business funds, not surplus funds.

What were the facts?

The assessee, a cooperative society registered under the Karnataka Souharda Sahakari Act, claimed deduction under Section 80P. The Assessing Officer disallowed the deduction on interest earned from FDs with other banks, arguing it was not eligible under Section 80P(2)(d) and that the society was not a cooperative society as per the IT Act. The CIT(A) partly allowed the appeal.

What were the issues?

Whether interest income earned by a cooperative society from investments in banks other than cooperative societies is eligible for deduction under Section 80P, and whether the assessee is considered a cooperative society for the purpose of Section 80P.

Which sections of the Income-tax Act were involved?

Section 80P,Section 40(a)(ia),Section 194A,Section 194H,Section 194J

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Income Tax Appellate Tribunal, ABENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Respondent: Ms. Neha Sahay, D.R
Hearing: 22.04.2025Pronounced: 17.07.2025

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the revenue is directed against the order of the ld. CIT(A)/NFAC dated 05.04.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1063945858(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2017-18. 2. The Revenue has raised the following grounds of appeal:

a) "On facts and circumstances of the case and in law, the Learned CIT(A)/(NFAC) has erred in deleting the disallowance u/s.80P(2)(a)(i) of the IT Act of Rs.3,42,99,582/-, without appreciating that the assessee Society has earned interest income from

The order continues below.

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