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2023 (11) TMI 245 - AT - Income TaxRevision u/s 263 - exemption of interest income earned by the assessee co-operative society from other co-operative banks or other banks - debatable issue - diversified view on topic - HELD THAT:- There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i). As decided in M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit [2018 (12) TMI 1926 - ITAT PUNE] interest income earned on fixed deposits with bank partake of the business income which is eligible for deduction u/s 80P(2)(a)(i) Fact of existence of debate on the issue of taxability of the interest income earned on the deposits made with other co-operative banks or other banks proved. Therefore, in the light of the law settled in the case of Malabar Industrial Co. Ltd [2000 (2) TMI 10 - SUPREME COURT] the power of revision cannot be exercised by the ld. PCIT in exercising of power vested with him u/s 263 in respect of debatable issue. Even assuming for a moment, there is failure on the part of the Assessing Officer to examine the issue of taxability of interest earned on deposits made with co-operative banks or other banks, in our considered opinion, the power of revision cannot be exercised by ld. PCIT in view of the fact that even on remand to the Ao, AO is barred from taking a view against the assessee in view of the consistent view taken by this Tribunal that such interest income qualifies for deduction u/s 80P(2)(a)(i). Thus, the order of remand by this Tribunal would be futile exercise, nothing but a useless formality. We are of the considered opinion that PCIT was not justified in exercising the power of revision vested with him u/s 263 of the Act in the facts of the present case. Accordingly, the appeal filed by the assessee stands allowed.
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