The Kukarwada Nag Shah Bank Ltd Vs DCIT

Parties Involved

Facts Summary

The assessee, a co-operative bank, filed its original return of income electronically on 07.09.2018, declaring total income of Rs.3,60,31,680/-. The return was processed under section 143(1) of the Income Tax Act and selected for scrutiny. The Assessing Officer (AO) issued notices under section 143(2) and 142(1) of the Act. The AO noticed that the assessee had claimed a deduction of Rs.15,48,652/- under the head “Any Other Amount Allowable as Deduction” in Schedule BP of the return, comprising of Rs.3,00,000/- towards Education Cess, Rs.6,28,652/- towards Shareholder Benefit Fund and Rs.6,20,000/- towards utilisation of Shareholder Welfare Fund. The AO did not accept the explanation of the assessee regarding their allowability and accordingly, added the entire claim to the total income of the assessee as per assessment order u/s 143(3) of the Act dated 16.06.2021. The assessee filed an appeal before the first appellate authority, which was dismissed by the Commissioner of Income Tax (Appeals). The assessee is now in second appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Non-adjudication of claim of deduction in respect of Education Fund and Members Welfare Fund
• 2. Disallowance of Shareholder Benefit Fund of Rs.6,28,652/-

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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