2024 (4) TMI 1153 - AT - Income Tax

Denial of deduction u/s 80P(2)(d) - interest income receipts from investment with co-operative society - HELD THAT - Admittedly, the appellant s case is covered by the decision of the co-ordinate Bench on identical facts in the case of Urapar Coop. Agriculture Service Society Ltd 2023 (5) TMI 1357 - ITAT AMRITSAR held since, appellant society being a cooperative society and investment in FDR s was made in another cooperative Society and hence, it is eligible for deduction u/s u/s 80P(2)(d) - Appeal filed by the assessee is allowed.

Summary

Issues Involved:
Challenge to addition of Rs.34,62,146 on disallowance of deduction u/s 80P(2)(d) of the Income Tax Act, 1961.

Detailed Analysis:

1. Issue of Appeal Against CIT(A) Order:
The appeal was filed against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 21.12.2023. The appellant challenged the confirmation of the addition of Rs.34,62,146 to the return income due to the disallowance of deduction u/s 80P(2)(d) of the Income Tax Act, 1961 for Assessment Year 2018-19.

2. Contentions of the Assessee:
The appellant, a cooperative agricultural society providing credit facilities for agriculture development, contended that the CIT(A)'s decision misdirected itself by upholding the action of the AO based on a judgment related to a different section of the Income Tax Act. The appellant claimed deduction u/s 80P(2)(d) for income received from investment with a cooperative society, citing a co-ordinate Bench decision supporting their case.

3. Arguments by the Parties:
The appellant's counsel argued for deletion of the addition, emphasizing the eligibility for deduction u/s 80P(2)(d) based on the nature of the appellant as a cooperative society. The ld. DR stood by the impugned order but failed to counter the contentions raised by the appellant's representative.

4. Tribunal's Decision and Rationale:
After considering the rival contentions and relevant citations, the Tribunal found the appellant's case aligned with a co-ordinate Bench decision involving a similar scenario. The Tribunal referred to the decision in the case of Urapar Coop. Agriculture Service Society Ltd. and held that the appellant, being a cooperative society, was eligible for deduction u/s 80P(2)(d) for interest income from investments in a cooperative bank.

5. Conclusion and Judgment:
The Tribunal concluded that the ld. CIT(A)'s order was flawed and not in line with the facts on record. Consequently, the addition of Rs.34,62,146 was deleted, and the appeal filed by the assessee was allowed. The Tribunal pronounced the order in the open court on 16.04.2024, ruling in favor of the appellant based on the established legal principles and precedents.

This detailed analysis highlights the key issues, arguments presented by the parties, the Tribunal's decision, and the final outcome of the appeal concerning the disallowance of deduction under section 80P(2)(d) of the Income Tax Act, 1961.