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2021 (10) TMI 571 - AT - Income TaxDeduction u/s 80P - Assessee is a co-operative society providing credit facilities to its members - entire claim of deduction u/s 80P denied for the reason that the assessee is a co-operative bank and not a co-operative society - HELD THAT:- The Hon’ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT] had held that the co-operative societies providing credit facilities to its members is entitled to deduction u/s 80P(2)(a)(i) - It was further held by the Hon’ble Apex Court that section 80P(4) of the I.T.Act is to be read as a proviso. It was stated by the Hon’ble Apex Court that section 80P(4) of the I.T.Act now specifically excludes only co-operative banks which are co-operative societies engaged in the business of banking i.e. engaged in lending money to members of the public, which have a licence in this behalf from the RBI. The Hon’ble Apex Court had enunciated various principles in regard to deduction u/s 80P - We restore the issue of claim of deduction u/s 80P of the I.T.Act to the files of the A.O. for de novo consideration. Denial of alternative claim of deduction u/s 80P(2)(d) of the I.T.Act stating that since section 80P(4) of the I.T.Act is invoked, the assessee is not entitled to any deduction u/s 80P - We direct the A.O. to verify whether interest / dividend is received by the assessee out of investments made with Cooperative Societies. If the assessee earns interest / dividend income out of investments with co-operative society, the same is entitled to deduction u/s 80P(2)(d) of the I.T.Act. With these observations, I restore the issue to the files of the A.O. CIT(A) has also directed the A.O. to verify whether the assessee has deducted TDS on interest payment to non-members (interest payment exceeding ₹ 10,000 poer annum). The direction of the CIT(A) is in accordance with law, since the assessee ought to have deducted TDS on interest payment to non-members when the payment exceeds ₹ 10,000 per annum. Therefore, the direction of the CIT(A) is upheld. Appeal filed by the assessee is partly allowed for statistical purposes.
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