Secretary Co-operative Cane Development Union Ltd Vs ITO (ITAT Delhi)
The appeals concern the denial of Section 80P deduction for interest earned from surplus deposits placed in scheduled and nationalized banks for AYs 2017-18 and 2020-21. The lower authorities treated the interest of Rs. 89,88,343 and Rs. 1,79,10,356 as income from other sources, holding it was not “derived” from eligible business activity under Section 80P(2). The Revenue relied on a Gujarat High Court ruling supporting this view, while the assessee cited an Andhra Pradesh High Court decision rejecting such treatment. As no jurisdictional High Court ruling from Allahabad exists on this issue, the Tribunal applied the Supreme Court’s principle that when two views are possible, the one favorable to the assessee should be adopted. Accordingly, the Tribunal allowed the deduction and accepted the assessee’s sole substantive ground. The appeals were thus allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
These assessee’s twin appeals in ITA Nos. 3407 & 3408/Del/2024 for Assessment Years 2017-18 and 2020-21 , arise against the CIT(A)/NFAC , Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1057773306(1) & 1057773541(1) both dated 07.11.2023, in proceedings u/s 143(3) o f the Income Tax Act, 1961 (in short “the Act”), respectively.
2. Heard both the parties at length. Case files perused.
