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2023 (9) TMI 150 - AT - Income TaxDeduction denied u/s 80P(2)(d) - interest and dividend received from cooperative bank/cooperative society from the investments made in other cooperative banks - assessee is a cooperative society and is carrying on the activities of marketing agricultural produce grown by the members and providing credit facilities to the members by advancing loans to them - HELD THAT:- In the instant case, the amount which was invested in banks to earn interest was not any amount due to its members. Further the claim of the assessee in u/s 80P(2)(d) was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to its members, as there were no takers. Therefore they had deposited the money in a co-operative bank again which interest/dividend was earned. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. See Andhra Pradesh State Co-operative Bank [2011 (6) TMI 215 - ANDHRA PRADESH HIGH COURT]. We respectfully following the view taken in the case of PCIT & Anr. Vs. Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and State Bank Of India [2016 (7) TMI 516 - GUJARAT HIGH COURT] hold that the interest income earned by a cooperative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. It is directed that the interest earned by the assessee from commercial banks may be considered under the head ‘income from other sources’ and relief may be granted as available to the assessee u/s 57 of the Act in accordance with law. Accordingly ground No. 2 and 3 raised by the assessee stands partly allowed for statistical purposes.
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