SRI SAI CHANNABASAVESHWARA PATTINA SOURDHA SAHAKARI SANGHA NIYAMITH,SINDHANUR vs. INCOME TAX OFFICER, WARD-1 , RAICHUR
Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI WASEEM AHMEDAssessment Year: 2020-21
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 28/06/2024 in ITA No. ITBA/NFAC/
S/250/2024-25/1066184195(1) for the assessment year 2020-21. 2. The only issue raised by the assessee is that the learned CIT(A) erred in holding the interest income earned on statutory deposit with cooperative bank as well as commercial bank is not eligible for deduction under section 80(2)(a)(ia) or 80P(2)(d) of the Act.
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3. The relevant facts are that the assessee is a cooperative society registered under The Karnataka Souhardra Sahakari Act 1997. The assessee is engaged in the activity of accepting deposits from the members and providing credit facility to the members. The assessee in the year under consideration declared income at NIL after claiming deduction under section 80P(2)(a)(i) of the Act for Rs. 72,78,017/- only.
During the assessment proceedings, the AO found that the assessee has shown interest earned from FDR maintained with cooperative bank and SB account with Scheduled bank which are detailed as under: S. No. Name of the Bank Nature Interest Amt. (Rs.) 1. Vikash Souharda Cooperative Bank Ltd FDR 7,66,011/- 2. Raichur District Central Cooperative Bank FDR 6,87,470/- 3. Manvi Pattina Souharda Sahakari Bank FDR 7,90,192/- A Total
22,43,673/-
4. IDBI Bank
SB
13,654/-
5. Kotak Mahindra Bank
SB
2,62,424/-
6. Axis Bank
SB
2352/-
B
Total
2,78,430/-
Total (A +B)
25,22,103/-
On question by the AO, the assessee explained that as per Rule 28 of the Karnataka Cooperative Societies Rules, 1960 and the order passed by the