Tribunal Grants Deduction for Interest Income from SLR Funds, Condoning 8-Day Filing Delay for AY 2020-21. The ITAT allowed the assessee's appeal for the assessment year 2020-21, condoning an 8-day delay in filing. The Tribunal found merit in the assessee's ...
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Tribunal Grants Deduction for Interest Income from SLR Funds, Condoning 8-Day Filing Delay for AY 2020-21.
The ITAT allowed the assessee's appeal for the assessment year 2020-21, condoning an 8-day delay in filing. The Tribunal found merit in the assessee's claim that interest income from Statutory Liquidity Ratio funds qualified for deduction under sec. 80P(2)(a)(i) of the Income Tax Act, 1961, thus granting the deduction.
Issues involved: The judgment involves the appeal for assessment year 2020-21 against the National Faceless Appeal Centre, Delhi's Din and Order u/s. 143(3) of the Income Tax Act, 1961.
Delay in filing appeal: The delay of 08 days in filing the appeal was condoned based on the assessee's solemn averments citing the precedent of Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) emphasizing substantial justice.
Substantive grievance - Eligibility for deduction: The main grievance of the assessee revolved around an amount of Rs. 2,85,982/- representing alleged interest income, which was held as not eligible for sec. 80P(2)(a)(i) deduction.
Contentions of the parties: The Revenue argued that the amount in question was an excessive component in the deduction claim and the correct statement of facts was not filed in the lower appellate proceedings, leading to the rejection of the deduction.
Judgment and reasoning: After considering the arguments, the Judicial Member found merit in the assessee's case. The assessee had consistently claimed the sum to be representing its Statutory Liquidity Ratio (SLR) as mandatory compliance with banking norms for a cooperative society. Citing the decisions in CIT vs. Karnataka State Cooperative Apex Bank [2001] 251 ITR 194 (SC) and CIT vs. Nawanshahar Central Cooperative Bank Ltd., [2007] 289 ITR 6 (SC), which favored the assessee, it was held that the interest derived from SLR funds qualified for sec. 80P(2)(a)(i) deduction. As a result, the assessee's substantive grievance was accepted, and the appeal was allowed accordingly.
Conclusion: The appeal of the assessee was allowed based on the acceptance of the substantive grievance regarding the eligibility for deduction under sec. 80P(2)(a)(i).
Separate Judgement (if applicable): No separate judgment was delivered in this case.
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