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2023 (11) TMI 1221 - AT - Income TaxDeduction u/s 80P - claim denied on the basis of assessee having nominal members and associated members - assessee's contention that being a primary agricultural co-op. society, they are eligible for the said deduction - HELD THAT:- We find that the decision of Mavilayi Service Cooperative Bank Ltd. & Ors. [2021 (1) TMI 488 - SUPREME COURT] wherein held that claim of assessee cannot be denied on the basis of assessee having nominal members and associated members. As respectfully following the view taken in the case of PCIT & Anr. Vs. Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and Hon’ble Gujarat High Court in the case of State Bank Of India [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. The Ld.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] It is 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. With the above directions, we remit this issue to the Ld.AO.
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