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2024 (2) TMI 579 - ITAT BANGALOREDeduction claimed u/s. 80P(2)(d) - interest / dividend income earned from Co-operative Bank - HELD THAT:- As considered the judgment passed in the matter of Kedambady Keyur Primary Agricultural Co- operative Society Ltd. [2023 (11) TMI 1221 - ITAT BANGALORE] following the view taken in the case of PCIT & Anr. Vs. Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and State Bank Of India Vs. CIT [2016 (7) TMI 516 - GUJARAT HIGH COURT] we hold that, the interest income earned by a cooperative society on its investments held with a cooperative bank that do not have license under section 22 of the Banking Regulation Act 1949, falls outside the definition the term, ‘Banking Company” as per section 2(c) of the Banking Regulations Act, 1949, would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. AO is thus directed to carry out necessary verification in respect of the that same to consider the claim of deduction u/s.80 P(2)(d) of the Act. Further, we make it clear that the assessee is not entitled for deduction u/s 80P(2)(a)(i) of the Act in view of judgement of Hon’ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd [2010 (2) TMI 3 - SUPREME COURT] wherein as directed that in the event it is found that the interest is earned by the assessee from such commercial/cooperative banks that fall within the definition of “banking company’ as per section 2(c), Section 5(b) and holds license under section 22 of the Banking Regulation Act 1949, such interest are to be considered under the head ‘income from other sources’ however, relief may be granted as available to the assessee u/s 57 of the Act in accordance with law. Thus we remit the issue to the file of AO to pass orders in the light of the ratio laid down in the said order. Appeal filed by the assessee stands allowed for statistical purposes.
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