VEERASAIVA VIDYA VARDHAKA SANGHA EMPLOYEES CREDIT CO-OP SOCIETY LTD., ,BALLARI vs. INCOME TAX OFFICER, WARD-2, BELLARI

ITA 2345/BANG/2024Status: DisposedITAT Bangalore18 March 2025AY 2017-18Bench: SHRI WASEEM AHMED (Accountant Member), SHRI PRAKASH CHAND YADAV (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that interest income earned from statutory deposits mandated by the Karnataka State Co-operative Societies Act should be considered operational income eligible for deduction under section 80P(2)(a)(i). The AO is directed to re-examine the taxability and quantum of deduction.

What were the facts?

The assessee, a cooperative society engaged in providing credit facilities, claimed deduction under section 80P(2)(a)(i) for interest income earned from deposits. The AO disallowed this deduction, stating the income was not from financing activities with members.

What were the issues?

Whether interest income earned from statutory deposits made by a cooperative society is eligible for deduction under Section 80P(2)(a)(i) as business income.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 57(2),Section 58

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV

For Appellant: Shri Siva Prasad Reddy, ITP
For Respondent: Shri Ganesh R Gale, Standing Counsel for the Dept
Hearing: 09.01.2025Pronounced: 18.03.2025

PER WASEE M AHMED, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 05/10/2024 vide DIN No. ITBA/APL/S/250/2024-25/1069473196(1) for the assessment year 2017-

18.2.

The interconnected issue raised by the assessee pertains to the disallowance of deduction claimed under section 80P(2)(i) of the Act for Rs. 9,44,990/- only.

3.

The facts in brief are that the assessee is a cooperative society and engaged in the business of providing credit facilities to its members. The assessee for the year under consideration claimed deduction of Rs. 40,86945

The order continues below.

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