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2024 (1) TMI 851 - AT - Income TaxDeduction u/s. 80P(2)(a)(i) - interest and dividend incomes received by the assessee, a primary agricultural credit society under the Kerala Co-operative Societies Act, 1969 (Kerala Act) from Ernakulam District Co-operative Bank as income from other sources u/s. 56 - HELD THAT:- Revenue authorities have, we find, denied the assessee’s claim in view of the decision in Totgar’s Co-operative Sales Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] which, as argued by Shri Ramdas, the learned counsel for the assessee, stands considered in Peroorkkada Service Co-operative Bank Ltd. [2021 (12) TMI 1084 - KERALA HIGH COURT] The entire premise of the decision in Totgars’ Co-operative Sales Society(supra), is whether the income arising to a society on it’s deposits with other co-operative society/bank arises to it in the normal course of business or is on it’s surplus funds for the time being. The Apex Court found it to be latter, so that the income was not assessable u/s 28, i.e., as business income, but only as income from other sources, as was by the Revenue u/s. 56. The issue of the same being, in the alternative, deductible u/s.80P(2)(d) of the Act did not come up for consideration before it. Even if, therefore, as the Revenue contends, the income arises to the assessee on it’s surplus funds and, accordingly, is assessable u/s. 56 of the Act, the same, where otherwise eligible, stands to be deducted u/s.80P(2)(d) of the Act. Continuing further, whether assessable as business income or otherwise, where the same forms part of the gross total income, the same, on satisfaction of the condition/s therefor, would qualify for deduction under the relevant clause of section 80P of the Act. The matter has been explained by the Cochin Bench per it’s decisions in Mundakkayam SCB Ltd. v. ITO [2024 (1) TMI 766 - ITAT COCHIN] and ITO v. The Adichanalloor Farmers SCB Ltd. & Ors [2023 (8) TMI 1417 - ITAT COCHIN] also expressing it’s view in its respect, even as the decision in Peroorkkada Service Co-operative Bank Ltd. [2021 (12) TMI 1084 - KERALA HIGH COURT] would in any case hold. The impugned sum accordingly stand to be deducted u/s.80P(2)(d) of the Act.
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