Deduction u/s 80P eligible towards grants from West Bengal State Government to cooperative societies

Udyan Large Size Multipurpose Cooperative Society Limited Vs ITO (ITAT Kolkata)

ITAT Kolkata held that grants from the West Bengal State Government to cooperative societies are not income from other sources and eligible for deduction under section 80P of the Income Tax Act, 1961.

Facts- In the return of income filed on 26.03.20 18 for A.Y. 20 17-18, deduction under section 80P has been claimed at Rs.65,844/-. During the course of complete scrutiny under CASS, ld. Assessing Officer noticed that in the Profit & Loss Account, the assessee has claimed miscellaneous income of Rs.9,92,664.28. The ld. Assessing Officer confronted the assessee to explain the nature of the said miscellaneous income, but could not get satisfactory reply, as a result of which, the ld. Assessing Officer treated it as income from other sources. The assessee carried the matter in appeal before the ld. CIT(Appeals), but it again failed to get any relief. Now the assessee is in appeal before the Tribunal.

Conclusion- We find that the miscellaneous income of Rs.9,92,664/- mainly constitutes grant received from the West Bengal Government for various activities as per its registered bye-laws. We do not find any reason to treat any of the element of miscellaneous income enumerated above as income from other sources. Since the alleged sum of Rs.9,92,664/- is the income earned by the Society for the purpose of its objects, the same is eligible for deduction under section 80P of the Act. We thus reverse the finding of ld. CIT(Appeals) and allow Grounds No. 2, 3 & 4 of the assessee directing the ld. Assessing Officer not to treat Rs.9,92,664/- as income from other sources and the same should be considered as income earned by the Society eligible for deduction under section 80P of the Act.

FULL TEXT OF THE ORDER OF ITAT KOLKATA

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