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2023 (6) TMI 1278 - AT - Income TaxRevision u/s 263 - as per CIT(A) interest income earned by the assessee out of surplus funds is not eligible for deduction in terms of provisions of section 80P(2)(d) - HELD THAT:- We are of the considered view that section 80P(4) is of relevance only in a case where the taxpayer, who is a co-operative bank, claims a deduction u/s 80P which is not the facts of the present case. Therefore, we find no merits in the aforesaid reasoning adopted by the PCIT vide impugned order passed u/s 263. Claim of deduction u/s 80P(2)(d) 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. AO has rightly allowed the claim of deduction under section 80P(2)(d) of the Act in respect of the interest earned from the co-operative banks and thus the assessment order cannot be held to be erroneous. As in Malabar Industrial Co. Ltd.[2000 (2) TMI 10 - SUPREME COURT] held that in order to invoke section 263, the assessment order must be erroneous and also prejudicial to revenue, and if one of them is absent, i.e., if the order of the Income-tax Officer is erroneous but is not prejudicial to Revenue or if it is not erroneous but is prejudicial to Revenue, recourse cannot be had to section 263 of the Act. Since both the conditions for invoking the provisions of section 263 of the Act are not satisfied in the present case, therefore the impugned order passed by the learned PCIT under section 263 of the Act is quashed - Decided in favour of assessee.
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