THE KANKREJ TALUKA SHIHORI CO. OP. PURCHASE & SALE UNION LTD.,BANASKANTHA vs. THE DY.CIT, GANDHINAGAR CIRCLE, GANDHINAGAR

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

There is a delay of 35 days in filing the present appeal for which the assessee stated that due to the negligence on the part of the staff, the delay in filing the appeal has incurred. The delay is condoned.

As regards the ground no. 1 relating to dividend received from other co-operative society of Rs. 4,10,960/-, the same should be taken as 4,10,955/- and the same are eligible for deduction u/s. 80P(2)(d) of the Act. The ld. A.R. submitted that the assessee has received dividend in respect of following details:- Share Dividend Avak Year 2017-18 Indian Farm Forestry Development Cooperative 200000 31-05-2017 Krishak Bharati Cooperative Ltd. 188250 18-10-2017 Gujarat State Co-operative Marketing Federation Ltd. 2400 19-12-2017 B.K. Dis Sales & Purchase Union Ltd. 10960 31-03-2018 Total 401610 Godavari Fertilisers and Chemical Ltd. 7500 21-08-2017 Gujarat Narmada Valley Fertilizer & Chemical Ltd. 1845 16-10-2017 Total 9345 410955 The learned CIT(A) has submitted that Godavari Fertilisers and Chemical Ltd. and Gujarat Narmada Valley Fertilizer & Chemical Ltd. are not from the co-operative societies and the same should be excluded. The ld. A.R. relied upon the decision of Hon’ble Supreme Court in case of Malaviya Service Co-operative Bank Ltd vs. CIT Calicut & Anr Civil Appeal Nos. 7343 to 7350 of 2019 order dated 12th Jan, 2021.

The ld. D.R. submitted that the chart shown at page 5 itself categorically mentions that its share dividend and not that interest income as such, therefore the Assessing Officer has rightly rejected 80P(2)(d). The ld. D.R. further submitted that the assessee has not taken into account that these entities are not co-operative societies except that of Krishak Bharati Co- operative Ltd., Indian Farm Forestry Development Cooperative and Gujarat State Co-operative Market Division Ltd. but this needs to be verified.

We have heard both the parties and perused all the relevant materials available on record. In respect of page no. 5 wherein the assessee has given the details of share dividend, these details were not present before the Assessing Officer in the context of verifying the interest received from the co-operative societies and therefore the matter is remanded back to the file of Assessing Officer for proper verification of this aspect in consonance with the evidences filed before us and adjudicate the same as per the provisions of the Income Tax Act. Assessee be given opportunity of hearing by following principles of natural justice. This ground no. 1 is partly allowed for statistical purposes.

As regards ground no. 2 relating to interest received from Dena Bank amounting to Rs. 46,780/- on the basis of information in Form No. 46AS and interest received on account of accumulated provident fund of the employees. This aspect also needs verification.

The ld. D.R. relied on the assessment order and the of ld. CIT(A).

We have heard both the parties and perused all the relevant materials available on record. As regards ground no. 2, the interest is received on the component of provident fund of the staff and the interest thereon and thus it is allowable u/s. 80P(2)(e). This aspect was not taken into account by the Assessing Officer as well as by the ld. CIT(A) and thus ground no. 2 is required to be verified as the assessee at page no. 14 of the paper book has given the details to that effect. Thus, the matter is remanded back to the file of the Assessing Officer for proper verification and adjudication of the issues as per the provisions of the Income Tax Act. The assessee be given opportunity of hearing by following principles of natural justice. Thus ground no. 2 is partly allowed for statistical purposes.

At the time of hearing, the assessee has taken a plea that where assessment made u/s. 143(1) exemption claimed by the assessee should be considered for which the assessee has relied upon the decision of Hon’ble Delhi Tribunal in case of South India Club Vs. ITO (2024) 163 taxmann.com 479. This oral submission taken by the assessee is not relevant in the context that the assessment is made u/s. 143(3) and the regular assessment is merged with these proceedings. Thus, this contention of the assessee will not be applicable in the present case as the assessment has been selected for limited scrutiny on the issue of deduction under chapter VIA and the assessment is concluded u/s. 143(3) of the Act. Thus, this contention is rejected.

In the result, the appeal of the assessee is partly allowed for statistical purposes.