Bhagur Urban Credit Co-operative Society Ltd. Vs ITO (ITAT Pune)
The ITAT Pune bench has ruled in favor of Bhagur Urban Credit Co-operative Society Ltd., deleting an addition of Rs. 1,78,500 made by the Income Tax Officer (ITO) under Section 68 of the Income-tax Act, 1961. The dispute arose during the assessment year 2017-18 when the assessee, a cooperative society, was scrutinized for depositing large sums in old currency notes during the demonetization period.
The assessee provided details of 15 members from whom the deposits were received, totaling Rs. 1,78,500 between November 9-11, 2016. However, the ITO rejected the explanation, treating the amount as unexplained cash credit. The CIT(A) upheld the addition.
On appeal, the ITAT noted that the assessee had submitted all necessary particulars of the depositors. The Tribunal followed the judicial precedent set by its Bangalore bench in Prathamika Krushi Pattina Sahakari Sangha Niyamitha Itagi Pepsin (ITA No.593/Bang/2021) and Bhageerathi Pattina Sahakara Sangha Niyamitha Vs. ITO (ITA No.646/Bang/2021). In those cases, similar additions against cooperative societies for deposits during the demonetization period were deleted. Citing these precedents, the ITAT Pune bench overturned the lower authorities’ decision and directed the deletion of the addition, thereby allowing the assessee’s appeal. The ruling affirms that a cooperative society’s deposits from its members, when properly documented, do not constitute unexplained income under Section 68.
