ASSITANT COMMISSIONER OF INCOME TAX,CIR.1(3),SURAT, SURAT vs. SARJAN CO-OP.HOUSING SOCIETY LTD.,, SURAT

Department represented by Shri Vinod Kumar, Sr. DR Assessee represented by Shri Esmayeel Seherwala, A.R. Date of hearing 03/01/2023 Date of pronouncement 03/01/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the revenue is directed against the order of National Faceless Appeal Centre, Delhi (in short, the NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A) dated 11/05/2022 for the Assessment year (AY) 2014-15. The revenue has raised following grounds of appeal: “(i) On the facts and in the circumstances of the case and in law, the learned Commissioner of income Tax (Appeals) has erred in deleting the addition made by the AO on account of disallowance of deduction claimed by the assessee U/s 80P(2)(d) of the Act of Rs, 31,57,772/- as the interest received from the Surat District Co Operative bank does not qualify for the deduction U/s 80P(2)(d) of the Act. (ii) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in deleting the addition made by the AO ignoring the decision of Hon'ble Supreme Court in the case of Totgars Co Operative Sale Society Ltd reported in 322 ITR 283, wherein it was held that interest earned from ACIT Vs Sarjan Co-Op Housing Society Ltd. investment made in any bank not being Cooperative society , is not eligible for deduction U/s 80P(2)(d) of the Act. (iii) On the facts and in the circumstances of the case and in Law, Ld. CIT(A) has erred in not appreciating the fact that such interest income on its surplus and idle funds not immediately required for its business , is not income from business taxable U/s 28 of the Act but taxable as income from others sources U/s 56 of the Act, whereas for availing the exemption or 100% deduction U/s 80P of the Act, the income specified in clauses (a) to (f) of sub section (2) of section 80P which should be its business or operational income. (iv) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in deleting the addition made by the AO ignoring the decision of Hon'ble High Court of Karnataka in the case of Totgars Cooperative sale society (2017)395 ITR, has held that the intention of legislature is clear that cooperative banks are not specie of genus cooperative society , which would entitle to exemption or deduction under the special provisions of chapter VI- A in the form of section 80P of the Act. This finding has also been approved by the Hon'ble High Court judgment of the Hon'ble High Court of Gujarat in the case of Katlary Kariyana Merchant Sahkari Sarafi mandali Ltd for A.Y 2015-16 in R/SCA No.20585 of 2019. (v) It is therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of assessing officer may be restored to the above extent. (vi) The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal.”