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2022 (9) TMI 296 - AT - Income TaxDeductions u/s 80P - interest earned on banking activities done by the assessee-society - HELD THAT:- Tribunal in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors [2022 (3) TMI 75 - ITAT RAIPUR] had after drawing support from the judgment of Tumkur Merchants Souharda Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] on the basis of its exhaustive deliberations concluded, that interest income earned on the surplus funds which were parked as deposits by the co-operative society in the normal course of the business of providing credit facilities to its members, i.e., at a point of time when there were no takers for the said funds was duly entitled for deduction under Sec. 80P(2)(a)(i). We, thus, in terms of our aforesaid observations direct the AO to allow the assessee’s claim for deduction under Sec. 80P(2)(a)(i). Disallowance of deduction of the income from paddy procurement business u/s 80P(2)(a)(iii) - HELD THAT:- As in the case of the present assessee, it is the claim of the ld. AR that no part of the procurement of paddy was made by the assessee-society in the course of its paddy procurement business from non-members, therefore, restricting of its claim for deduction u/s. 80P(2)(a)(iii) of the Act to 95.2% of the profits earned from the said business activity by the CIT(Appeals) was not justified. Considering the parity of the facts involved in the present case as against those which were involved in [2022 (3) TMI 75 - ITAT RAIPUR] we are of the considered view that the matter in all fairness on the same terms be restored to the file of the AO for fresh adjudication. In the course of the set-aside proceedings the AO shall read-judicate the assessee’s claim for deduction under Sec. 80P(2)(a)(iii) i.e. after determining as to what extent the assessee society had facilitated the marketing of the agricultural produce grown by non-members, and thus, restrict the it’s claim for deduction u/s. 80P(2)(a)(iii) only to the extent of the profit relatable thereto. Needless to say, the assessee shall in the course of the set-aside proceedings furnish the requisite details/documents that are called for by the A.O. Thus, the Ground of appeal No.1(iii) raised by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Deduction u/s 80P(2)(c)(ii) of the profit from PDS activity i.e, distribution of essential commodities to the ration holders through fair price shop - HELD THAT:- As stated by the AR, and rightly so, the Tribunal in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors [2022 (3) TMI 75 - ITAT RAIPUR] had after necessary deliberations on the issue in hand remanded the matter to the file of the A.O, with a specific direction i.e, to restrict its claim for deduction as regards its profit from PDS only to the extent of its net profit i.e., after considering the proportionate expenses - we on the same terms restore the matter to the file of the AO, with a direction to restrict the assessee’s claim for deduction as regards its profit from PDS only to the extent of its net profit i.e., after considering the proportionate expenses. Thus, the Ground of appeal allowed for statistical purposes in terms of our aforesaid observations. Entitlement of a co-operative society for claim of deduction u/s 80P(2)(d) qua the dividend received on shares of a co-operative bank - HELD THAT:- As relying on case of Gramin Sewa Sahakari Samiti Maryadit & Ors [2022 (3) TMI 75 - ITAT RAIPUR] we herein vacate the disallowance of the assessee’s claim for deduction u/s 80P(2)(d) of the dividend received on shares of a co-operative bank, viz. Jila Sahakari Bank. Thus, the Ground of appeal raised in appeal by the assessee is allowed in terms of our aforesaid observations.
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