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TMI Blog2021 (1) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... s been paid to Associate Members and CIT(A) has equated it and named them as non-members. In our view this approach is erroneous. For the AY 2015-16, there is no obligation to deduct tax at source by a Co-operative Society u/s.194A of the Act as laid down by the Hon ble Karnataka High Court in the case of CIT Vs Karnataka State Apex Cooperative Bank Ltd. [ 2016 (6) TMI 1409 - KARNATAKA HIGH COURT] - We therefore delete the addition sustained by the CIT(A). - Decided in favour of assessee. - ITA No.1485/Bang/2019 - - - Dated:- 31-12-2020 - SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER For the Appellant : Shri K. Mallaha Rao, Advocate For the Respondent : Smt R. Premi, Jt.CIT(DR)(ITAT), Bengal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry evidence about the share holding and share application of member and non-members to whom interest paid of ₹ 10,000/- and above have been paid totalling of ₹ 1,47,84,915/- but till date the assessee has not submitted the same. Hence I am constraint to hold that ₹ 14,47,84,915/- is the interest paid to non members in contravention with the provisions section of 194A of the I.T. Act,1961, therefore the interest paid of ₹ 1,47,84,915/- which is debited in the P L amount of the assessee as at 31.03.2015 is disallowed u/s 40(a)(ia) of the I.T. Act 1961 and added to the total income of the assessee. 5. Before the CIT(Appeals), the Assessee gave details where payment made was less than ₹ 10,000/- to each membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 7,22,336/- and on interest paid of ₹ 47,25,651/-, consisting of payment of interest below ₹ 10,000/-, to members/non-members, including, interest paid on, Cumulative deposits, S.B. a/cs, Small Savings deposits, Staff FWF deposits, Staff Service Sec deposit, Fixed deposit DJCC interest. The AO should allow the assessee adequate opportunity to make its submissions and opportunity for rebuttal in case of any adverse findings. After due examination and verification, the AO may allow the claims of the assessee pertaining to expenditure on interest, paid without deduction of tax at source, on payments below 10,000/-, and payment to members . 8. The AO has given effect to the order of CIT(A) and allowed relief in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to deduction of tax at source cannot be equated with the provisions of Sec. 80P(2)(a)(i) of the Act, which deals with deduction while computing total income. The admitted position is that the sum of ₹ 93,36,928/- has been paid to Associate Members and CIT(A) has equated it and named them as nonmembers. In our view this approach is erroneous. 13. For the AY 2015-16, there is no obligation to deduct tax at source by a Co-operative Society u/s.194A of the Act as laid down by the Hon ble Karnataka High Court in the case of CIT Vs Karnataka State Apex CoITA operative Bank Ltd. (supra). We therefore delete the addition sustained by the CIT(A). 14. In the result, the appeal by the assessee is allowed. Pronounced in the open c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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