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2022 (3) TMI 1350 - AT - Income TaxDisallowance u/s 80P(2)(d) - AO held that a Co-op Bank does not fall under the purview of coop society referred to in section 80P(2)(d) - AO denied the claim of exemption u/s 80P in respect of interest derived from Saraswat Cooperative Bank Ltd. - HELD THAT:- What is relevant for claiming of deduction u/s 80P(2)(d) is that interest income should have been derived from the investment made by the assessee cooperative society with any other cooperative society. In the present case, the reasoning given by the lower authorities for denial of exemption u/s 80P(2)(d) of the Act is that interest was received from cooperative bank not from cooperative society has no legs to stand as a cooperative bank is also a cooperative society as held by the Karnataka High Court in the case of CIT vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot [2015 (1) TMI 821 - KARNATAKA HIGH COURT] As regards to the eligibility of exemption u/s 80P(2)(d), this issue was considered by the Hon’ble Karnataka High Court in the case of CIT vs. Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] wherein referring to the case of Totgars Co-operative Sales Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] held that the ratio of decision of the Hon’ble Supreme Court in the aforesaid case (supra) held not to be applicable in respect of interest income on investment as same falls under the provisions of section 80P(2)(d) and not u/s 80P(2)(a)(i) of the Act. Thus the reasoning adopted by the lower authorities cannot be accepted. However, there can be no dispute on facts that the appellant society had received the interest from another cooperative society and, therefore, the income so derived is exempt under the provisions of section 80P(2)(d) of the Act. Thus, the grounds raised by the assessee are allowed.
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