Narayana Guru Cooperative Vs ITO (ITAT Delhi)
In Sree Narayana Guru Cooperative & Credit Society Ltd., the ITAT Delhi allowed the assessee’s appeal and deleted additions of ₹4.67 crore made u/s 68 towards alleged unexplained term deposits and cash deposits. The Tribunal observed that the society was a mutual thrift & credit cooperative accepting deposits only from its own members and granting loans to members, and detailed member-wise records, cash book and financial statements had already been furnished.
The ITAT noted that the AO wrongly treated the closing deposit liability as unexplained despite the fact that only ₹94.78 lakh fresh deposits were accepted during the year, while most balances were opening liabilities (as reflected in the deposit chart on page 8). It held that demanding extensive third-party proofs for small denomination member deposits was unjustified and that cash deposits were adequately explained from member collections. Consequently, additions were held to be high-pitched and unsustainable, and relief was granted for both assessment years.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. These appeals are filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)/ National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to ‘ld. CIT (A)’) dated 30.06.2025 for Assessment Year 2012-13
