BELLAD BAGEWADI KRISHNI SEVA SAHAKARI BANK LTD.,BELGAUM vs. ITO (WARD) 1(3), BELGAUM

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ITA 260/PAN/2019Status: DisposedITAT Panaji21 November 2022AY 2009-105 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 distinction between nominal and regular members is irrelevant, following a Supreme Court decision. The disallowance of the Section 80P deduction was therefore deleted.

What were the facts?

The assessee, a Krishi Seva Sahakari Bank, claimed a deduction under Section 80P(2)(a)(i) for interest income. The lower authorities denied this deduction, arguing the interest payer was not a member of the society.

What were the issues?

Whether interest income earned from a non-member entity is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, PANAJI ‘SMC’ BENCH : PANAJI

Before: SHRI SATBEER SINGH GODARA

Hearing: 17.11.2022Pronounced: 21.11.2022

ORDER This assessee’s appeal for assessment year 2009-10, arises against the CIT(A)’s Belgaum order dated 05.01.2019 passed in Case No. CIT(A)/BGM/10129/2018-19, in proceedings u/s. 143(3) r.w.s. 260A of the Income Tax Act, 1961 (in short "the Act").

2.

Heard both the parties. Case file perused.

3.

Coming to the assessee’s sole substantive grievance that both lower authorities have erred in law and on facts in denying it section 80P(2)(a)(i) deduction of Rs.25,01,300/- in issue, the CIT(A)’s detailed discussion to this effect reads as follows :

1.

2 ITA.No.260/Pan/2019 & ITA.No.296/Pan/2019 Bellad Bagewadi Krishi Seva Sahakari Sangh Ltd., Hukkeri. Karnataka.

3 ITA.No.260/Pan/2019 & ITA.No.296/Pan/2019 Bellad Bagewadi Krishi Seva Sahakari Sangh Ltd., Hukkeri. Karnataka.

4 ITA.No.260/Pan/2019 & ITA.No.296/Pan/2019 Bellad Bagewadi Krishi Seva Sahakari Sangh Ltd., Hukkeri. Karnataka.

4.

The Revenue vehemently argued during the course of hearing that since assessee has derived the impugned interest income from long term deposits made with M/s. Vishwanath Sugar Ltd., it does not deserve the impugned deduction as the said interest payer was not a member of the society. I find that the issue of such a membership is no more res integra in the light of hon’ble apex court recent landmark decision in Mavilayi Service Co- operative Bank Ltd., vs., CIT [2021] 431 ITR 1 (SC) wherein their lordships have rejected the Revenue’s identical stand seeking to create a distinction between nominal and regular members of an eligible society. This is not the Revenue’s case raised during the course of hearing that M/s. Vishwanath Sugars Ltd., is otherwise not a member of this assessee society or its membership violates the provision of the Karnataka state co-operative law, in any manner, whatsoever. The impugned section 80P deduction disallowance is deleted therefore.

5.

No other ground or argument has been raised during the course of hearing.

5 ITA.No.260/Pan/2019 & ITA.No.296/Pan/2019 Bellad Bagewadi Krishi Seva Sahakari Sangh Ltd., Hukkeri. Karnataka.

6.

This assessee’s appeal is allowed in above terms.

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