MHASIMATA MAHILA GRAMIN BIGAR SHETI SAHAKARI PATHSANSTHA LTD,DHULE vs. ITO, WARD1, DHULE, DHULE

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ITA 881/PUN/2024Status: DisposedITAT Pune20 June 2024AY 2017-18Bench: DR. DIPAK P. RIPOTE (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)9 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee is eligible for deduction under Section 80P(2)(a)(i) for interest income earned from nationalized banks. The AO's denial of deduction was based on an incorrect interpretation of the law.

What were the facts?

The assessee, a cooperative society, claimed deduction under Section 80P(2)(a)(i) for interest income earned from nationalized banks. The Assessing Officer denied this deduction, relying on the Totagars' Co-operative Sale Society Ltd. case, as the banks were not cooperative societies.

What were the issues?

Whether interest income earned by a cooperative society from nationalized banks is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, and whether interest under Section 234B is leviable when advance tax is not payable.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 208,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE

Before: DR. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Hemant Shah – AR
For Respondent: Shri Rajesh Gawali – Addl.CIT(DR)
Hearing: 19/06/2024Pronounced: 20/06/2024

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1.

This is an appeal filed by the Assessee against the order of ld.Commissioner of Income Tax, Appeal(ADDL/JCIT)(A)-5, Kolkata u/sec.250 of the Act dated 27.02.2024. The Assessee has raised following grounds of appeal :

1. The learned A.O has grossly erred in disallowing the deduction claimed u/s.80P(2)(a)(i) of Income Tax Act, 1961 in respect of interest received of Rs. 4,12,160/ from Central Bank of India, and Dena Bank, which is a attributed to the part of business income and hence appellant is eligible for the deduction. Therefore, finding of the learned A.O be vacated and due deduction u/s. 80P(2)(a)(i) of the I T Act may please be allowed. Mhasimata Mahila Gramin Bigar Sheti Sahakari Pathsanstha Limited [A]

2. The learned A.O. has grossly erred in charging the Interest of Rs.29,822/-, u/s.234 B of the I T Act, even though appellant society is not liable to pay the Advance Tax as per provisions of section 208 of the I T Act. Therefore, Interest charged at Rs.29,822/-, u/s.234 B of the IT Act, may please be deleted.

3.

The Appellate craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal.”

2.

At the outset of hearing, Shri Hemant Shah attended appeared on behalf of the assessee. Brief facts of the case : 2.1 In the assessment order it is mentioned that the assessee society has received interest of Rs.4,12,160/- on investment made with Nationalized Banks i.e.Rs.1,98,510/- from Central Bank of India, Rs.1,99,606/- and Rs.14,044/- from Dena Bank. The Assessing Officer denied assessee’s claim for deduction u/sec.80P(2)(A) following the decision of Totgars’ Co-operative Sale Society Ltd., Vs. ITO.

Findings &Analysis : 4. The Assessing Officer(AO) in the assessment order denied assessee deduction u/sec.80P(2) of the Act relying on the decision of the Hon’ble Karnataka High Court in the case of PCIT Vs. Totagars Co-operative Sale Society [2017] 83 taxmann.com 2 Mhasimata Mahila Gramin Bigar Sheti Sahakari Pathsanstha Limited [A] 140(KAR). The AO in the Assessment Order observed that the Banks in which the assessee has deposited / invested funds such as Central Bank of India & Dena Bank are not Co-operative Societies. Therefore, the AO held that assessee is not eligible for deduction u/sec.80P(2)(a)(i) of the Act. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A). Ld.CIT(A) confirmed addition made by the AO. Aggrieved by the order of the Ld.CIT(A), assessee has filed appeal before the ITAT.

5.

The assessee had claimed deduction u/sec.80P(2) for the interest earned from Central Bank of India and Dena Bank. In this case, the AO has ignored most important submission of the assessee that the Assessee is a Co-Operative Society registered under Maharashtra State Co-Operative Society Act and it is under the control of

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