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Income Tax Appellate Tribunal, DELHI BENCH :H: DELHI
Before: SHRI SAKTIJIT DEY, VICE- & DR. B.R.R. KUMAR
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH :H: DELHI) BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No. 1605/Del/2022 Assessment Year: 2018-19 ITO, Ward-58(7), The Co-operative Urban Thrift New Delhi & Credit Society Ltd., 31/64, Vs. Bhikam Singh Colony, (PAN:AABAT2253J) Vishwas Nagar, Shahdara Delhi-1100 32
(Appellant) (Respondent)
Present for: Department by : Shri Amit Katoch, Sr. DR Assessee by : Shri Pranshu Singhal, CA
Date of Hearing : 12.10.2023 Date of Pronouncement : 27.10.2023
O R D E R PER SAKTIJIT DEY, VICE PRESIDENT: This is an appeal by the Revenue against order dated 31.05.2022
passed by National Faceless Appeal Centre (NFAC), Delhi for the
assessment year 2018-19.
The present appeal raises two issues. The first issue is with regard
to availability of deduction under Section 80P(2)(d)-(i) of the Income-
Tax Act,1961 in respect of interest/dividend income earned from other
Co-operative Banks and second issue relates to allowability of deduction
2 ITA No.1605 /Del/2022 AY: 2018-19 under Section 80P(2)(c)(ii) in respect of interest income earned from
other co-operative banks.
Briefly, the facts are, assessee is a Credit Co-operative Society and
assessed in the status of Association of Persons (AOP). In the return of
income filed for the assessment year under dispute, assessee had claimed
deduction under Section 80P(2) in respect of interest income earned
from other co-operative banks as well as nationalized banks. While
examining the issue in course of assessment proceedings, the Assessing
Officer observed that deduction under Section 80P(2)(d) of the Act is
available on interest income earned from other co-operative societies
and not from banks. Accordingly, he disallowed assessee’s claim of
deduction in respect of interest and dividend earned.
Assessee contested the aforesaid disallowance before learned First
Appellate Authority.
After considering the submission of the assessee and relying upon
the ratio laid down in certain judicial precedents, learned Commissioner
(Appeals) held that the primary activity of the assessee is lending money
to its members. Therefore, the interest income earned has to be treated as
3 ITA No.1605 /Del/2022 AY: 2018-19 income from business. He further held that the interest and dividend
income earned from other co-operative banks is allowable as deduction
under Section 80P(2)(d). In so far as interest earned from the other
banks, learned Commissioner (Appeals) held that since such interest of
Rs.37,712 is below the threshold limit of Rs.50,000, it can be allowed as
deduction under Section 80P(2)(c)(ii) of the Act.
We have considered rival submissions and perused the material on
record.
In so far as the issue relating to allowability of deduction under
Section 80P(2)(d) in respect of interest and dividend income earned
from investments made in other co-operative banks, we do not find any
infirmity in the decision of learned Commissioner (Appeals) as there are
plethora of decisions of Tribunal holding that co-operative banks will
have same status as that of co-operative societies.
As regards the allowance of deduction of Rs.37,712 under Section
80P(2)(c)(ii) of the Act, we are unable to agree with the decision of the
learned First Appellate Authority as the conditions of the said provision,
in our view, are not fulfilled. This is so because, it cannot be said,
4 ITA No.1605 /Del/2022 AY: 2018-19 assessee is engaged in any activity other than the activities provided
under Section 80P(2)(a) and (b). Therefore, we sustain disallowance of
Rs.37,712.
In the result, the appeal is partly allowed. Order pronounced in the open court on 27 .10.2023. Sd/- Sd/- ( DR. BRR KUMAR ) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT Dated: 27th October, 2023 Mohan Lal