Cooperative Society Appeal Partially Allowed on Taxability of Interest Income from Syndicate Bank

The ITAT Pune partially allowed the appeal filed by a cooperative society regarding the taxability of interest income earned from Syndicate Bank. The delay in filing the appeal was condoned, and the matter was remanded to the Assessing Officer for further assessment based on the source of investments.

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Issues:
1. Taxability of interest income earned by cooperative society from Syndicate Bank.
2. Condonation of delay in filing the appeal.

Issue 1: Taxability of interest income earned by cooperative society from Syndicate Bank:

The appellant, a cooperative society, filed an appeal against the order of the ld. Commissioner of Income Tax (Appeals) for the assessment year 2013-14. The Assessing Officer had denied the claim for exemption of interest on Fixed Deposit Receipts (FDRs) with Syndicate Bank, stating that the FDRs were made as long-term investments by the appellant society. The ld. CIT(A) confirmed the addition, reasoning that there was no evidence to show that the investments were made from business surplus. The appellant society contended that the interest income should be treated as business income. The ITAT Pune referred to a previous decision and held that if the FDRs were placed from the surplus generated by the cooperative society, the interest income would be considered as business income. As the source of the investments was not clear in the present case, the matter was remanded to the Assessing Officer to determine the eligibility of the interest income for exemption under section 80P of the Income Tax Act. Consequently, the appeal filed by the assessee was partly allowed.

Issue 2: Condonation of delay in filing the appeal:

The appellant had filed the appeal with a delay of 21 days, citing the serious illness of the Manager of the appellant society as the reason for the delay. The appellant requested condonation of the delay, which was supported by the ld. CIT-DR. The ITAT Pune considered the submissions and decided to condone the delay, allowing the appeal to proceed on merits.

In conclusion, the ITAT Pune partially allowed the appeal filed by the cooperative society concerning the taxability of interest income earned from Syndicate Bank. The delay in filing the appeal was condoned, and the matter was remanded to the Assessing Officer for further assessment based on the source of investments.

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