IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT Assessment year : 2018-19 M/s. Dandelappa Krishi Pattina Vs. The Income Tax Officer, Sahakari Bank Ltd., Ward 1(1), Dandeli – 581 325. Hubli.

Taluka Haliyal, District Uttar Kannada.

PAN: AAAAD 3076G APPELLANT RESPONDENT Appellant by : Shri Vishal S. Rao, CA Respondent by : Shri Ganesh R Ghale, Standing Counsel for the Revenue.

Date of hearing : 23.09.2025 Date of Pronouncement : 24.10.2025

O R D E R

1. This appeal is filed by Dandelappa Krishi Pattina Sahakari Bank Ltd.

(the assessee/appellant) for the assessment year 2018-19 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 10.12.2024 wherein the appeal filed by the assessee against the assessment order passed u/s. 143(3) of the Income-

tax Act, 1961 [the Act] dated 22.4.2021 by the National e-Assessment Centre, Delhi [ld. AO] was dismissed.

2. The assessee is aggrieved with the same and in appeal.

3. The brief facts of the case show that assessee is a primary agricultural co-operative society registered under the Karnataka Co-operative Societies, Act, 1959. It is holding certificate issued by the Registrar of Co-operative Societies since 1958. It is engaged int the business of accepting deposits and providing credit facilities to its members and making investments. The assessee filed its return of income on 10.10.2018 at a gross total income of Rs.19,97,173 and claimed the same as deduction under section 80 P of Chapter VIA of the Act resulting into total income at Nil.

4. The return was picked up for scrutiny and it was found that assessee has earned interest from cooperative bank and dividend of Rs.1,10,197. The ld. AO held that assessee is not entitled to deduction under Chapter VIA of the Act. Therefore he computed the gross income and interest income from other than the regular members such as investment income and held that 10.86% is to be disallowed. Accordingly the total claim of Rs.19,97,173 was disallowed to the extent of 10.86% thereof amounting to Rs.2,16,892. Accordingly the deduction claimed by the assessee of Rs.19,97,173, interest from co-operative bank of Rs.12,05,115 was only disallowed to the extent of Rs.2,16,892.

5. It was also found that assessee has earned the profit of Rs.4,36,689 from fertilisers & PDS. It was held that tis profit is not from cooperative activity and does not qualify for deduction claimed u/s.

80P of the Act.

6. Accordingly the assessment order was passed u/s. 143(3) r.w.s. 144B of the Act determining the total income at Rs.6,02,580.

7. The assessee preferred appeal before the ld. CIT(A) with respect to disallowance of Rs.2,16,892. He upheld the disallowance holding that in the absence of details of trading and indirect expenses not furnished, same is justified. With respect to the disallowance of deduction of Rs.4,36,689 u/s. 80P being profit on sale of fertiliser and food grains to non-members in cash, he also confirmed the same in the absence of relevant documentary evidence. He held that it could not be established that the same of fertiliser and PDS is made to members only. Accordingly the appeal of the assessee was dismissed.

8. Against the appellate order the assessee is in appeal. The ld. CA, Mr.

Vishal Rao, submitted a paperbook containing 96 pages relying upon several judicial precedents and also on the facts of the case. He further submitted an application under Rule 29 of the ITAT Rules, 1963 being interest certificate earned on investment made with Karnataka District Co-op. Bank and other co-operative societies. He submits that these evidence were not before the ld. AO as well as the ld. CIT(A) and has also been made available to the assessee recently, therefore the same may be admitted and the issue may be decided.

9. The ld. DR, Shri Ganesh R. Ghale, Advocate, Standing Counsel for the Revenue, vehemently supported the orders of the ld. lower authorities.

10. I have careful