BANNANJE GRAHAKARA VIVIDHODDESHA SAHAKARA SANGHA LTD., ,UDUPI vs. INCOME TAX OFFICER, WARD-1, & TPS, , UDUPI

ITA 79/BANG/2024Status: DisposedITAT Bangalore06 May 2024AY 2016-17Bench: SHRI GEORGE GEORGE K, VICE PRESIDENT SHRI LAXMI PRASAD SAHU (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that interest income from deposits in banks is not operational income and therefore not eligible for deduction under Section 80P(2)(a)(i). However, the assessee is eligible to claim the cost of funds for earning such interest income, and the matter is remitted to the AO for determination. The provision for audit fee was allowed as a business expenditure.

What were the facts?

The assessee, a cooperative society, claimed deduction under Section 80P(2) on interest income earned from deposits in banks. The Assessing Officer (AO) disallowed this deduction, treating the interest as income from other sources. The assessee appealed this decision.

What were the issues?

Whether interest income earned by a cooperative society from bank deposits is eligible for deduction under Section 80P, and whether audit fees are allowable as a business expenditure.

Which sections of the Income-tax Act were involved?

Section 80P,Section 56,Section 37(1)

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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI GEORGE GEORGE KSHRI LAXMI PRASAD SAHU

For Appellant: Shri Mahesh R Uppin, Advocate
For Respondent: Shri Ganesh R Ghale, Advocate – Standing
Hearing: 07.03.2024Pronounced: 06.05.2024

PER SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER This is an appeal filed by the assessee against the order passed by the NFAC, New Delhi dated 18/09/2023 in DIN No. ITBA/NFAC/S/250/2023-24/1056184584(1) for the assessment year 2016-17. 2. The appeal is stated to be barred by limitation by 58 days. The ld. Counsel for the assessee has filed an application in writing seeking condonation of delay and has made oral submissions also before us regarding the same. Referring to the following observations of the Hon'ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst

The order continues below.

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