Case Law Details
Rifle Factory Cooperative Society Limited Vs ACIT (ITAT Kolkata)
From perusal of Sections 80, 81 & 82 of West Bengal Cooperative Societies Act, we notice that the assessee-society is statutorily required to transfer not less than 10% of its net profit to a Reserve Fund and the same shall be invested in a Government Saving Bank including Nationalized Bank, Cooperative Banks and Regional Rural Banks or in any security specified in Section 20 of the Indian Trust Act, 1882 or in the business of the Cooperative Society in such manner as may be prescribed.
Now the claim of the assessee is that it apportion 10% of its Net Profit to a Reserve Fund and deposit it in the form of Fixed Deposit in the Cooperative Bank. Now this action of the assessee is purely based on the Rules and Regulations provided under the West Bengal Cooperative Societies Act, 2006, which governs such Cooperative Society. Further the assessee in order to carry out its business activities of providing credit facilities to its members has to adhere to the Rules and Regulations of the West Bengal Cooperative Societies Act, 2006. The alleged interest income, which is appearing in the audited Profit & Loss Account at page 18 of the paper book, is earned from investments (FDR’s) and such investments are appearing under the head “Reserve Fund Investment” in the audited balance-sheet placed at page 10 of the paper book. These facts stand uncontroverted by the ld. D.R. and we being satisfied that the alleged interest income is from the Fixed Deposits, which were made by the assessee in the course of business and in order to comply the statutory requirements of the West Bengal Cooperative Societies Act, 2006. Therefore, the same should be treated as part of the business income and is eligible for deduction under section 80P(2)(a)(i) of the Act and should not be treated as income from other sources. Thus the effective ground raised by the assessee is allowed and the ld. Assessing Officer is directed to give the deduction under section 80P of the Act on the alleged interest income.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal at the instance of assessee for assessment year 2015-16 is directed against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 18.11.2022, which is arising out of the order under section 143(3)of the Act on 08.12.2017 framed by ld. Assessing Officer, Kolkata.
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