Black Diamond Karmachari Credit Co-operative Society Ltd. v/s Income Tax Officer

Parties Involved

Facts Summary

The assessee is a credit-cum-consumer Co-operative Society registered under Maharashtra State Co-operative Societies Act, 1960, and also running Gas Agency for its members. The return of income for the year under consideration was filed on 25/09/2018, offering the gross total income at ` 1,08,57,078, and total income at ` 3,42,861, after claiming deduction under section 80P of the Income Tax Act, 1961. According to the Assessing Officer the assessee society claimed deduction of ` 38,88,015, as a deduction under section 80P(2)(a)(i) of the Act on the interest income earned out of surplus fund invested with a Co-operative Banks namely Nagpur District Central Co-operative Bank and State Bank of India in the form of fixed deposits. The Assessing Officer made a detailed analysis and concluded that the surplus amount invested with Urban Co-operative Bank and nationalised bank is not eligible to claim deduction. He concluded that this interest income earned out of the investment made in the form of time deposits with those banks has to be assed as income from other sources. After considering the facts, the Assessing Officer completed the assessment under section 143(3) of the Act by assessing the total income at ` 42,30,876, wherein he disallowed deduction claimed under section 80P(2)(a)(i) of the Act for a sum of ` 38,88,015. The assessee being not satisfied with the order passed by the Assessing Officer, filed appeal before the first appellate authority. The learned CIT(A) confirm…

Legal Issues

• 1. The Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi has erred in confirming action of Ld AO of disallowing the deduction claimed u/s 80P(2)(a)(i) of Rs.38,88,015/–.
• 2. The Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi has erred in confirming action of AO not allowing the deduction u/s 80P(2)(d) of Rs.38,88,015/-.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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