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Facts
The assessee claimed deduction under section 80P(2)(d) for interest income earned from a Co-operative Bank. The Assessing Officer disallowed the entire deduction, and the CIT(A) confirmed the disallowance for the interest earned from the savings bank account, stating it's not an investment.
Held
The Tribunal held that the interest earned on investment in the Co-operative Society is eligible for deduction under section 80P(2)(d), but the interest earned from the savings bank account cannot be treated as income or dividend from investment. Since the assessee could not provide material to show the savings account amount was an investment, the CIT(A)'s order was upheld.
Key Issues
Whether the interest income earned from a savings bank account maintained with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961.
Sections Cited
80P(2)(d)
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Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against separate common orders dated 27.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment years 2020-21 & 21-22.
Since issues raised in both the appeals are similar based on the same identical facts, with the consent of the both the parties, we proceed to hear both the appeals together and pass consolidated order for the sake of convenience.
We shall take up appeal in for AY 2020-21.
We find this appeal was filed with a delay of 4 days. The assessee filed an affidavit for condonation of delay stating reasons for the said delay. Upon hearing both the parties and on examination of the affidavit, we find that the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time and accordingly, we condone the delay and admit the appeal for adjudication.
The assessee raised 4 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance partly to an extent of ₹.14,607/- in the facts and circumstances of the case.
6. At the outset, we find that the assessee claimed deduction under section 80P(2)(d) of the Income Tax Act, 1961 [“Act” in short] of ₹.1,72,880/- earned as interest income received from Co-operative Bank out of which ₹.1,58,273/- is from FDs and ₹.14,607/- from saving account and others. The Assessing Officer CPC disallowed entire deduction claimed under section 80P(2)(d) of the Act. The ld. CIT(A) confirmed the disallowance of ₹.14,607/- for the reason that the amount kept in saving bank account is not an investment.
7. Having heard both the parties and perused the material available on record, we find that the assessee earned interest income of ₹.1,72,880/- from Co-operative Bank, out of which ₹.1,58,273/- is from FDs and ₹.14,607/- from saving account and others, which was disallowed by the Assessing Officer, CPC. Since, the interest of ₹.1,58,273/- on investment in the Co-operative society received by the assessee is eligible for deduction under section 80P(2)(d) of the Act, the ld. CIT(A) deleted the same. However, since, the interest earned out of saving bank account maintained in a co-operative bank cannot be treated as income or dividend from investment, the ld. CIT(A) confirmed the disallowance of ₹.14,607/-. The ld. AR Shri S. Senthil Kumar, Advocate could not bring on record any material to show that the amount kept in saving bank account is an investment. Thus, we find no infirmity in the order passed by the ld. CIT(A) and it is justified. Thus, the grounds raised by the assessee are dismissed.
AY 2021-22 8. We find the ground raised by the assessee in the assessment year 2021-22 is similar to the ground as raised in the assessment year 2020- 21, wherein, on similar issue on same identical facts and circumstances, we have confirmed the order of the ld. CIT(A) on this issue and dismissed the ground raised by the assessee and the same view taken by us is equally applicable to the assessment year 2021-22. Thus, the ground raised by the assessee is dismissed.
In the result, both the appeals filed by the assessee are dismissed. Order pronounced on 27th September, 2024 at Chennai.