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2023 (5) TMI 1177 - AT - Income TaxDeduction u/s 80P - interest income received from the co-operative bank - AO denied the deduction claimed by the assessee u/s 80P by applying the provisions of section 80P(4) since the assessee is providing credit facilities to its members - HELD THAT:- Section 80P(4) is of relevance only in a case where the assessee, who is a co-operative bank, claims a deduction under section 80P - we find no merits in the aforesaid reasoning adopted by the learned CIT(A) in denying deduction under section 80P(2)(d) of the Act to the assessee. In a recent decision in PCIT vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. [2023 (5) TMI 372 - SC ORDER] held that a taxpayer who is merely giving credit to its members cannot be said to be the Co-operative Banks/Banks under the Banking Regulation Act and the banking activities under the Banking Regulation Act are altogether different. Therefore, held that the assessee, a co-operative credit society, could not be termed a bank/co-operative bank and that being a credit society, it was entitled to exemption under section 80(P)(2) of the Act. Thus, there is also no basis in the finding of the AO that section 80P(4) is applicable to the assessee. Regarding the claim of deduction under section 80P(2)(d) of the Act, it is also pertinent to note that all co-operative banks are co-operative societies but vice versa is not true. We find that the coordinate benches of the Tribunal have consistently taken a view in favour of the assessee and held that even the interest earned from the co-operative banks is allowable as a deduction under section 80P(2)(d) of the Act. Thus we uphold the plea of the assessee and direct the AO to grant deduction under section 80P(2)(d) of the Act to the assessee in respect of interest income earned from investment with co-operative bank. Decided in favour of assessee.
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