HINGANGHAT NAGRI SAHAKARI PAT SANSTHA,HINGANGHAT vs. INCOME TAX OFFICER WARD-1, WARDHA

ITA 568/NAG/2024Status: DisposedITAT Nagpur10 February 2025AY 2020-21Bench: SHRI V. DURGA RAO (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the interest income earned by the cooperative society from its investments made with cooperative banks is derived from its business activities and should be treated as 'Income From Business', not 'Income From Other Sources'. Consequently, the assessee is entitled to the deduction under Section 80P.

What were the facts?

The assessee, a cooperative society, appealed against the CIT(A)'s decision to tax interest income from bank deposits as 'Income from Other Sources' and disallow Section 80P deduction. The assessee argued that these deposits were from member deposits and necessary for operational liquidity, not surplus funds.

What were the issues?

Whether interest income earned by a cooperative society on its deposits is taxable as 'Income from Other Sources' or eligible for deduction under Section 80P, and whether such income arises from business activities or surplus funds.

Which sections of the Income-tax Act were involved?

Section 80P,Section 56

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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR

Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER

For Appellant: Shri Suyash Ranka
For Respondent: Shri Abhay Y. Marathe

PER K.M. ROY, A.M.

This appeal by the assessee is emanating from the impugned order dated 28/08/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2015–16, 2018–19, 2020–21 & 2022–23

ITA no.566/Nag./2024 Assessment Year – 2015–16

2.

In its appeal, the assessee has raised following grounds:–

“1. That the Ld. Commissioner (Appeals) has erred in Law as well as in Facts by sustaining the addition of Rs.41,88,448/- as Income from other Source of Income and the attributes of activity carried out by the Appellant.

2.

That the Ld. Commissioner (Appeals) has er

The order continues below.

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