AI Drafter 
TaxTMI 
TaxTMI 
2025 (1) TMI 1822
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....S) and statutory notices were duly served upon the assessee along with the questionnaire and were also replied by the assessee by furnishing the necessary details / information. The ld. AO upon perusal of the said details/ information observed that the assessee has deposited cash into its different bank accounts and accordingly, the assessee was required by the AO to furnish the details of cash sales and cash deposits into the bank. The assessee submitted the copies of bank statements, audited accounts, bank loans, Bye laws of the society, details of cash deposited during demonetization period etc. The assessee also submitted the list of members of the society from whom the SBNs were received during the demonetization period. The assessee is a co-operative society engaged in selling fertilizers to its members and does not carrying on any banking business. The assessee has 4,000 members which has been accepted by the ld. Assessing Officer. The assessee submitted before the ld. AO that the money was received from the members of the assessee against sale of fertilizers. However, reply of the assessee was not accepted as satisfactory by the ld. AO for the reasons that the assessee is n....
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....of the ld. AO to see whether the sales were made in terms of legal tender and it is in fact for Reserve Bank of India to take the action for the said violation of receiving the sales consideration in nonlegal tender post 09.11.2016 as the assessee has received the money in non-legal tender in SBN, in violation of the RBI Circular. The case of the assessee is squarely covered by the decision of the co-ordinate bench in the case of Vidyasagar Samabay Krishi Unnayan Samity Ltd. vs. ACIT, Circle 38, Kolkata in ITA No. 06/KOL/2024 for A.Y. 2017-18, wherein the co-ordinate bench has held as under:- "5. We have heard the rival contentions and gone through the record. In this case, the ld. counsel has explained that no cash sales were made during the demonetization period. That the amount in question was already collected by the agents of the society from the farmers-members which was deposited by the agents with the assessee-society and the same was further deposited by the assessee-society in the bank account. Even from the record/cash sales register etc., there is no evidence on the file that the assessee-society has made cash sales by accepting demonetized currency during....
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....n. I also noticed that the assessee has also complied with the requirements of sec. 68 of the Act. The AO has also not stated that the assessee has not discharged the responsibility placed on it u/s 68 of the Act. Peculiarly, the AO is taking the view that the assessee was not entitled to collect the demonized notes and accordingly invoked sec. 68 of the Act. I am unable to understand as to how the contraventions, if any, of the notification issued by RBI would attract the provisions of sec. 68 of the Income tax Act. In any case, I notice that the assessee has also explained as to why it has collected demonetized notes after the prescribed date of 8.11.2016. The assessee has explained that it has stopped collection after the receipt of notification dated 14.11.2016 issued by RBI, which has clearly clarified that the assessee society should not collect the demonetized notes. Accordingly, I am of the view that the deposit of demonetized notes collected by the assessee from its members would not be hit by the provisions of section 68 of the Act in the facts and circumstances of the case. Accordingly, I set aside the order passed by Ld. CIT (A) on this issue and direct the A.O. to dele....
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....ome. The relevant provision of section 80P(1) reads as under: "(1) Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee." It means the addition made by CIT on account of provision for gratuity, provision for leave encashment eventually which was paid before filing of return of income u/s. 139(1) of the Act and provision for bad and doubtful debts, is eligible for deduction u/s. 80P of the Act in view of the fact that deduction is to be allowed out of gross total income. Accordingly, this disallowance in any way will not affect on income for the reason that this will also be part of gross total income and will be eligible for deduction u/s. 80P of the Act. These three common issues of assessee's appeal are allowed. 4. The only issue in this appeal of revenue is against the order of CIT (A) deleting the disallowance of deduction u/s. 80P of the Act in respect of receipts of interest on non-SLR funds F....
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....see's own case has held as under: "11. We have heard rival contentions and gone through facts and circumstances of the case. We find that the assessee bank has deployed total deposits into three types of income earning instruments i.e. CRR, SLF funds and non-SLR funds. The investments of the above funds are made as per RRB Act, 1976 and violations of the Act have been determined as SLR fund and non-SLR fund. Income has been determined according to the funds deployed as per RRB Act. We have gone through the above case laws and find that whether income is attributable to SLR or non-SLR funds would not make any difference for the purpose of quantifying deduction on interest by Cooperative Bank u/s. 80P(2)(a)(i) of the Act as deposits of surplus idle money available from working capital i.e. reserves, excess collection of interest and other incomes all attributable to banking business. Therefore, the interest earned on non-SLR funds will also qualify for deduction u/s. 80P(2)(a)(i) of the Act. Hon'ble Allahabad High Court in the case of CIT Vs. Muzaffarnagar District Co-operative Bank Ltd. (2013) 214 Taxman 498 (All) relying on the decision of Hon'ble Supreme Court in the case....