SECRETARY, CO-OPERATIVE CANE DEVELOPMENT UNION LTD, NAJIBABAD, DISTRICT-BIJNOR,NAJIBABAD, DISTRICT-BIJNOR vs. ASSESMENT UNIT, INCOME TAX DEPARTMENT, NORTH BLOCK NEW DELHI

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ITA 79/DEL/2025Status: DisposedITAT Delhi28 August 2025AY 2022-23Bench: Sh. Satbeer Singh Godara, Judicial Member & Sh. Naveen Chandra (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the interest income derived from surplus deposits in scheduled/nationalized banks should be allowed as a deduction under Section 80P. They accepted the assessee's ground against the department.

What were the facts?

The assessee, a cooperative union, appealed against an order disallowing deduction under Section 80P on interest income from surplus deposits. The lower authorities held this income was not derived from eligible business activity and should be taxed as income from other sources.

What were the issues?

Whether interest income earned by a cooperative society from surplus funds deposited in scheduled banks is eligible for deduction under Section 80P.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 80P,Section 80P(2)

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

Before: Sh. Satbeer Singh Godara & Sh. Naveen Chandra

For Appellant: Ms. Gurneet Kaur, Adv
Hearing: 28.08.2025Pronounced: 28.08.2025

Asstt. Year: 2022-23 Vs Secretary, Co-operative Cane CIT(A)/NFAC, Development Union Ltd., 34, Delhi-110001 Najibabad Bundaki Road, Distt. Bijnor, Uttar Pradesh-246763 (APPELLANT) (RESPONDENT) PAN No. AABAS8919C Assessee by : Ms. Gurneet Kaur, Adv. Revenue by : Sh. Rajesh Mahajan, Sr. DR Date of Hearing: 28.08.2025 Date of Pronouncement: 28.08.2025 ORDER

Per Satbeer Singh Godara, Judicial Member:

1.

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”).

2. Heard both the parties at length. Case file perused.

2.

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. 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.

3.

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.

4.

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 jurisdictional 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 adopted; to accept the instant sole substantive ground against the department, in very terms. Necessary computation shall follow as per law.

5.

No other ground or argument has been pressed before us.

6.

This assessee’s appeal is allowed. Order Pronounced in the Open Court on 28/08/2025.

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