BURDWAN CO-OPERATIVEAGRICULTURE & RURAL DEVELOPMENT BENK LTD.,BURDWAN vs. ITO, WARD-1(1), BURDWAN
Before: Shri Rajesh Kumar & Shri Sonjoy Sarma
Per Sonjoy Sarma, Judicial Member:
These appeals are filed by the assessee arising out of separate orders of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). Since the issues involved in the appeals are common and inter- related as they pertained to the same assessee, accordingly all the appeals were heard together and are being disposed of by this consolidated order. For the sake of convenience, we first take up the ITA
No.116/Kol/2025 for assessment year 2015-16 and outcome of this appeal shall apply mutatis mutandis to the interconnected appeals.
2. ITA No.116/Kol/2025 - Brief facts of the case are that the assessee is a cooperative society engaged in providing long-term credit
I.T.A. Nos.116 to 121/Kol/2025
Assessment Years: 2015-16, 2016-17, 2017-18, 2018-19, 2020-21 & 2022-2
Burdwan Co-Operative Agriculture & Rural Development Bank Ltd
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facilities to its members for agriculture and allied activities. The assessee filed its return of income for the assessment year 2015-16 by declaring total income of Rs.Nil. The return of the assessee was processed u/s 143(1) of the Act. The case of the assessee was selected for scrutiny under CASS for the following reasons:
Sl.no.
Reasons description
Reason code
1
Low income in comparison to very high investments appearing in balance sheet
BA06.01
2
Low income in comparison to high loans/advances/investments in shares appearing in balance sheet (Part A-BS, Income in Part B-TI)
BA06.02
3
Mismatch between income/receipts credited to Profit & Loss Account considered under other heads of income and income from heads of income other than business/profession (Schedule BP, Schedule
EI & Part-B-TI of return)
BA06.02
4
Large deduction claimed under chapter VI-A in ITR)
DD01.01
1 Subsequently, the notices u/s 143(2) and 142(1) of the Act were issued to the assessee and the assessee duly complied with such notices. During the assessment proceedings, the Assessing Officer observed that the assessee had shown interest income of Rs.1,43,64,931/- from investment made in LICI, Burdwan Central Co-op Bank Ltd, WB State Co-op Agri & Rural Dev Bank and IDBI, Burdwan. The Assessing Officer while passing the assessment order disallowed the claim of deduction u/s 80P(2)(a)(i) of the Act in respect of this interest income on the ground that the income was not earned from cooperative society operation but from deposits made in banks and other institutions. Accordingly, the I.T.A. Nos.116 to 121/Kol/2025 Assessment Years: 2015-16, 2016-17, 2017-18, 2018-19, 2020-21 & 2022-2 Burdwan Co-Operative Agriculture & Rural Development Bank Ltd
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Assessing Officer treated the entire interest income as taxable and assessed the total income of the assessee at Rs.34,77,809/-.
3. Dissatisfied with the above order, the assessee filed an appeal before the ld. CIT(A) contending that the investments were made in compliance of the statutory requirements under the West Bengal Co- operative Societies Act 2006. It was further submitted that similar additions for the assessment years 2012-13, 2013-14 & 2014-15 were deleted by the ld. CIT(A) in earlier order dated 30.09.2019, 03.02.2020 &
03.02.2020 respectively. However, the contention of the assessee was not considered by the ld. CIT(A) and the ld. CIT(A) sustained the addition so made by the Assessing Officer.
4. Aggrieved by the above order, the assessee has filed the present appeal before this Tribunal. At the time of hearing, the ld. AR argued that the assessee being a cooperative credit society which is engaged in the business of providing credit facilities to its members and the funds invested in the fixed deposits were not borrowed fund nor set-aside reserves funds kept for specific purposes but part of genuine working capital of the society. He also stated that funds were required for timely repayment of deposits to the members at the time of maturity. He also stated that the said investment was made in pursuant to the mandatory directions issued by the