SECRETARY, CO-OPERATIVE CANE DEVELOPMENT UNION LTD, NAJIBABAD, DISTRICT-BIJNOR,NAJIBABAD, DISTRICT-BIJNOR vs. ASSESMENT UNIT, INCOME TAX DEPARTMENT, NORTH BLOCK NEW DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Naveen Chandra
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2022-23, arises against the CIT(A)/NFAC, Delhi’s DIN & order No.
ITBA/NFAC/S/250/2024-25/1067372286(1) dated
06.08.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short
“the Act”).
Heard both the parties at length. Case file perused.
It transpires during the course of hearing that both the learned lower authorities have refused section 80P deduction to the assessee qua it’s interest income derived from surplus Secretary, Co-operative Cane Development Union Ltd.
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deposits kept in scheduled/nationalized banks amounting to Rs.2,09,71,712/-, in assessment order(s) dated 22.03.2024 and upheld in the lower appellate discussion.
Both the learned lower authorities hold that such an interest income as in the present instance received from parking of surplus funds in fixed deposits with scheduled/nationalized banks could not be held as “derived” from an eligible business activity under section 80P(2); and, therefore, the same deserves to be assessed as income from “other” sources only.
Mr. Mahajan also quotes (2025) 170 taxmann.com 336 (Gujarat) Brahmarshi Co-op. Credit Society Ltd. Vs. ACIT deciding the very issue in the Revenue’s favour. The assessee on the other hand draws strong support from the Vaveru Co-operative Rural Bank Ltd. vs. CIT [(2017) 396 ITR 371 (AP)] wherein their lordships have rejected the Revenue’s identical stand. Be that as it may, the fact remains that no valuable guidance has come from hon’ble juri ictional high court at Allahabad on the instant issue. That being the case, we hereby quote Commissioner of Income-Tax, West Bengal-I vs. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) to conclude that the view supporting the assessee’s case in such an instance has to be Secretary, Co-operative Cane Development Union Ltd.
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adopted; to accept the instant sole substantive ground against the department, in very terms. Necessary computation shall follow as per law.
No other ground or argument has been pressed before us.
This assessee’s appeal is allowed. Order Pronounced in the Open Court on 28/08/2025. (Naveen Chandra) (Satbeer Singh Godara) Accountant Member Judicial Member
Dated: 14/11/2025
*Subodh Kumar, Sr. PS*