Housing Loan Deduction u/s 80C Disallowed by AO: ITAT Confirms Eligibility of Co-op Credit Society for Deduction [Read Order]
The AO had disallowed the assessee’s ₹1.5 lakh deduction under Section 80C, holding that the Jana Utkarsh Urban Co-op Credit Society Ltd. was not an eligible institution to grant housing loans. The assessee produced a certificate from the society confirming that it is authorized to provide housing loans to its members.
The Panaji Bench of the Income Tax Appellate Tribunal (ITAT) held that repayment of a housing loan to a cooperative society is qualified for deduction under Section 80C(2)(xviii)(c). ITAT confirmed the eligibility of a cooperative credit society for deduction.
The assessee Allavuddin Unmarasab Hurakadli had not filed the return of income for A.Y.2016-17.The AO, based on the information found, that the assessee had made substantial cash deposits in the bank accounts during the F.Y.2015-16. The AO believed that the income had escaped the assessment and issued a notice. Further, a notice along with the questionnaire was issued. The assessee filed the return of income in compliance with the notice.
The AO, on perusal of the statement of the assessee filed in the assessment proceedings, found that the assessee had disclosed the repayment of a housing loan of Rs. 4,81,109/- The assessee had claimed a deduction under Section 80C of the Act of Rs. 1,50,000/- in respect of Housing loan repayment to The Jana Utkarsh Urban Cooperative Credit Society Ltd.
The AO was of the view that the said bank was not one of the entities or persons specified under Section 80C (2)(xviii)(c) as it was not specified whether such a bank can grant housing loans; therefore, the AO denied the claim of deduction under Section 80C of the Act of Rs. 1,50,000/-. The AO assessed the total income of Rs 10,94,109/- and passed the order.
Aggrieved by the order, the assessee filed an appeal before the CIT(A). The CIT(A) confirmed the action of the AO and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee filed an appeal before the Tribunal.
The assessee emphasised that the bank/cooperative society, which is engaged in the business of providing credit facilities to its members, also includes providing loans for the construction or purchase of houses. The assessee demonstrated the certificate issued by the bank.
The single bench of Pavan Kumar Gadale (Judicial Member), considering the facts, submissions and certificate referred, held that the assessee is eligible to claim deduction under Section 80Cof the Act towards repayment of housing loan and accordingly directed the assessing officer to delete the disallowance under Section 80C of the Act..
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