All. HC: Extension of Benefits of Schemes for SC, STs/OBCs to BPL Card Holders is a Matter of Policy  ||  Orissa High Court: Evidence Not Vitiated Merely Because Object is Openly Accessible to Public  ||  Bombay High Court: Desire of Contesting Elections Not Sufficient to Stay Conviction  ||  Tripura HC: Bail Granted to HIV-Positive Accused in NDPS Case  ||  Supreme Court: Cannot Allow Bail Condition Enabling Police to Track Movement of Accused  ||  Delhi High Court: Tesla's Trademark Infringement Suit Against Tesla Power India Referred to Mediation  ||  Kerala High Court: Long Lasting Provocation Can’t be Construed as Sudden Provocation  ||  MTP Cases: Expert Opinion Must be Given by Medical Professional Without Fearing Legal Repercussions  ||  Karnataka High Court: Byju’s Restricted from Allotting Share Till Decision of NCLT  ||  Telangana High Court: 12-Year-Old Rape Victim Allowed to Terminate 26 Weeks Pregnancy    

P P Pandurang Gramin Bigarsheti vs. Assessment Unit, Income Tax Department - (Income Tax Appellate Tribunal) (26 Jun 2024)

Interest earned by the assessee is eligible for deduction under Section 80P(2)(a) of IT Act

MANU/IP/0141/2024

Direct Taxation

Assessee is a Co-operative Credit Society engaged in the business of providing credit facilities to the members by accepting deposits from members. Assessee e- filed Return of Income claiming deduction under Section 80P(2)(a)(i) of Income Tax Act, 1961 (IT Act). The assessee's case was selected for scrutiny. Assessing Officer(AO) passed assessment order under Section 143(3) of IT Act . In the assessment order, assessee's claim for deduction under Section 80P(2)(a) was rejected.

The AO added the amount of Rs.41,65,336 treating as Income from Other Sources which is not eligible for deduction under Section 80P(2)(a)(i) of the Act. Therefore, the AO held that assessee is not eligible for deduction under Section 80P(2)(a)(i) of the Act. Aggrieved by the assessment order, assessee filed appeal before the learned CIT(A). Learned CIT(A) upheld the assessment order.

The assessee is a Credit Co-operative Societyregistered under Maharashtra Co-operative Societies Act. The prime function of the society is accepting deposits and advancing loans to the members. During the A.Y.2020-21, the assessee has earned an interest income of Rs.41,65,336 from investments with various co-operative banks/banks

The assessee had claimed deduction under Section 80P(2) for the interest earned from various Co-operative Banks / Nationalized / Scheduled Banks. In this case, the AO has ignored most important submission of the assessee that the Assessee is a Co-Operative Society registered under Maharashtra State Co-Operative Society Act and it is under the control of Registrar of Co-Operative Society Maharashtra State. The Assessee also submitted that there were no member who wanted to avail loan from society and surplus funds were invested to earn interest and such interest income is linked to business of the assessee and hence it is part of the Profit which is eligible for deduction under Section 80P(2)(a)(i) of the Act.

The Hon'ble ITAT Pune Bench in the case of Yashwant Nagari Sahakari Patsanstha Maryadit Vs. ITO in held that the assessee was eligible for deduction under Section 80P(2)(a ) of the Act on the Interest earned by assessee.In view of the decision of the High Court and ITAT, Pune, it is held that the Interest earned by the assessee is eligible for deduction u/sec.80P(2)(a) of the Act. Appeal of the assessee is allowed.

Tags : ASSESSMENT   DEDUCTION   ELIGIBILITY  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved