ITO Vs Shivoham Sagar Co-op. Credit Society Ltd (ITAT Ahmedabad)
ITAT Ahmedabad held that there is no basis for linking assessee’s alleged violation of RBI notification dated 8th November 2016 to section 68 of the Income Tax Act, when the nature and source is explained.
Facts- The assessee is a registered Cooperative Society under the Gujarat Co-operative Societies Act. AO observed that the assessee has claimed deduction u/s.80P relating to interest from Nationalized Banks. Therefore, he disallowed the deduction to the extent of Rs.4,79,001/- The AO also observed that the assessee had deposited cash during the period of demonetization in its bank account. The AO further observed that these deposits were made in the denominations of old currency notes (SBN) of Rs.500 and Rs.1000 to the extent of Rs.77,20,000/- on 10-11-2016, 11-11-2016 and 12-11-2016. AO added the total amount of Rs.74,65,543/- u/s.68 of the Act to the income of the assessee.
CIT(A) confirmed the addition u/s.80P of the Act and deleted the addition u/s. 68 of the Act. Being aggrieved, revenue has preferred the present appeal.
Conclusion- In the case of Sri Bhageeratha Pattina Sahakara Sangha Niyamitha, the Tribunal concluded that there is no basis for linking assessee’s alleged violation of RBI notification to section 68 of the Act, when the nature and source is explained.
