DCIT Vs Bongaon Co Operative Credit Society Limited (ITAT Kolkata)
ITAT Kolkata held that CIT(A) rightly allowed interest earned from a co-operative bank as eligible for deduction under section 80P(2)(d) of the Income Tax Act. Accordingly, appeal filed by revenue dismissed.
Facts- AO essentially made two additions on account of interest income received (Rs. 35,63,552/-) and as unexplained cash credit on account of sums deposited in cash by the appellant during the demonetisation period (Rs. 1,25,19,600/-).
CIT(A) deleted the addition on account of unexplained cash credit and granted partial relief on the addition made on account of interest received.
Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that while the appellant may have been accepting the demonetised currency notes even beyond the date of the RBI Circular dated 14.11.2016 then to as long as a valid explanation has been tendered for the said amounts, then the provisions of section 68 of the Act would not apply since, the said section would be triggered once the sales found deposited with the assessee were found to be unexplained. In this case, it is not proved that the sums of money found credited have not been explained, rather cash book etc. have been presented for appropriate perusal before the Ld. AO. In light of this fact the action of Ld. CIT(A) in deleting the impugned amount is upheld.
