9911796707
TMI Blog2025 (5) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI guidelines [RBI Amended Notification No.S.O.3408(E)(F.No.10/03/2016-FY.1 DATED 08/11/2016] during the demonetization period. 3. The order of the CIT(A) may be vacated & and that of Assessing Officer may be restored. 4. The appellant craves leave to add, amend, alter or delete any ground of appeal." Brief facts of the case are as under: 2. The assessee filed its return of income for year under consideration on 30/10/2017, declaring total income at nil. After claiming deduction of Rs. 2,17,08,211/- under chapter VI A of the Act. The case was selected for scrutiny to verify cash deposits during demonetization period, against which deduction was under chapter VI A, was claimed by the assessee. 2.1 Accordingly notice u/s.143(2) and 142(1) was issued to the assessee, calling upon to furnish relevant details/documents. In response to the statutory notices, assessee furnished profit and loss account, balance sheet, audit report, details of the cash deposits during demonetization period, bye laws of the society and various other details as required by the Ld.AO. 2.2 The Ld.AO noted that, the assessee is a co-operative credit society rendering credit facilities to its members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted that, assessee had cash balance of Rs. 40,02,329/- as under: "Rs. 8,94,000/- Nirmal Branch Rs 8,31,500/- Umrale Branch Rs. 9,24,500/- Bolinj Branch Rs. 5,28,500/- Umbergothan" 2.6 The Ld.AO thus was of the opinion that the assessee had excess amount of SBN cash during demonetisation in comparison to the cash balance as on 08/11/2016, amounting to Rs. 94,18,271/-. The Ld.AO thus made addition in the hands of the assessee u/s.69A as unexplained money by observing that onus to prove gennuiness of the transaction in cast on the assessee along with the source of such credits, which could not be fulfilled. 2.7 The Ld.AO further observed that, the assessee earned interest income amounting to Rs. 5,58,31,049/- and dividend income amounting to Rs. 3,67,78,600/- from the investment Cooperative Bank. 2.8 It was also noted that, assessee also earned commission and interest income amounting to Rs. 7,80,487/- from Maharashtra State Electricity Board and Rs. 57,200/- from locker rent activity. The Ld.AO thus observed that the assessee earned income from other than business activity from society amounting to Rs. 8,37,637/-. Assessee was thus called upon to furnish details in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es throughout the year. Nominal charges are taken from the members. Incomes are duly reported in Annual Report. The Accounts are separately audited by the Ministry of Co-operation Maharashtra State. There is not intentional mis-statement or mis-reporting of information, it just amounts to difference of opinion or understanding of presented information which has led to wrong interpretation. The surplus arising from the said transactions, details of which have been submitted on records in course of assessment proceeding is below Rs. 50,000/- which qualifies for the claim of deduction u/s 80(P)(2)(C). Section 80(P)(2)(C) of Income Tax Act 1961 read as "In the case of a co- operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed,- (i) where such co-operative society is a consumers' co-operative society, one hundred thousand rupees; and (ii) in any other case, fifty thousand rupees." From the above it can deduce that the surplus arising from MSEDCL commission and locker rent is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the assessee before the first appellate authority as well as the order passed by the Ld.CIT(A). We have perused the submissions advance by both sides in the light of record placed before us. 6. Ground No.1 raised by the revenue is on account of commission income and other income of the society allowed as deduction u/s.80P(2)(c) and u/s.80P(2)(d) of the Act. It is noted that, the commission income earned by the assessee is towards collection from MSEDCL bills, service rendered by the assessee to its members and customers. The Ld.CIT(A) noted that, the expenses incurred towards the collection of bills of MSEDCL, such as salary of employees, electricity charges, cash insurance, printing charges, computer and painter system maintenance etc. were directly attributable to the income and was verified by the Ld.CIT(A). 7.1 It is further noted that, the locker rent charges collected from the members were received towards services given to its members for providing locker space in credit society branches throughout the year. Nominal charges were taken from the members which were duly reported in audit report. The Ld.CIT(A) noted that, the accounts of the assessee separately audited b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countholders made in cash by society from its members throughout the year. Further the Society has received confirmations for all the bank accounts wherein they had deposited the cash pertaining to SBNs notes and other currencies notes and coins. We would like to furnish the summary of cash collections in various bank accounts during the demonization period along with the types of currency deposit whether SBNs or other types from 10.11.2016 till 31.12.2016:- Name of Bank and Branch Total cash deposited in bank Deposit made By way of SBNs Deposit made in other currencies notes and coins Vasai Vikas Sakahari Bank Ltd, Umrale Branch 12,48,000 12,48,000 0 Thane District Central Cooperative Bank,Vatar Branch 23,17,000 22,67,000 50,000 Bassein Catholic Cooperative bank, Umrale Branch 99,82,921 48,09,000 51,73,921 Vasai Vikas Sakahari Bank Ltd, Bolinj Branch 3,00,000 0 3,00,000 Thane District Central Cooperative Bank, Nirmal Branch 10,28,500 10,28,500 0 Grand Total 1,48,76,421 93,52,500 55,23,921 As it can be seen that the total cash deposited in SBNs during the demonization period is Rs.93,52,500 out of total cash deposited in bank accounts of various bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... branches. Out of total bill collections at its branches amounting to Rs. 1,12,31,001 for the period 08.11.2016 till 06.12.2016, bill collections made in SBNs were to the tune of Rs. 47,30,500 which was as per the instructions in circulars/notifications issued by MSEDCL and the same currency in SBNs was deposited in bank accounts in co-operative banks. The Society had stopped collecting the SBNs currency notes after 06.12.2016 on its account. The same can be seen from the confirmations letters submitted by the banks on the records. Further with respect to the Cash collection of MSEDCL Bills the society is entitled to received a commission amount which has been accounted for and reported in the Return of Income. Also the Cash collections and deposits made in the bank accounts are accounted for and reported for in the books of accounts maintained at its branches. This explains that the cash deposits/collections are properly recorded and with evidence and duly, legal and authorized, hence it cannot be considered as unexplained credit" 8. The Ld.AR at the time of submissions emphasised on the circular and the press release issued by the Government of India as well as MSEDCL placed at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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