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2024 (2) TMI 242 - AT - Income TaxDisallowance of deduction u/s 80P(2)(d) - gross interest receipt/dividend from Co-operative Bank - HELD THAT:- We see no reason to take any other view of the matter then the view so taken in the case of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT] as held Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the co-operative society from its investment with any other co-operative society. This provision does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the cooperative society from any investment with a co-operative society. It is immaterial whether any interest paid to the co- operative society exceeds the interest received from the bank on investments. The Revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. The Act does not speak of any adjustment as sought to be made out by learned counsel for the Revenue. The provision does not indicate any such adjustment in regard to interest derived from the co-operative society from its investment in any other co-operative society. Therefore, we do not agree with the argument advanced by learned counsel for the Revenue. Decided in favour of assessee. Addition in respect of rental income earned - We note that assessee has not claimed deduction u/s 80P(2)(d) of rental income - The rental income has been shown by the assessee in the computation of total income separately and paid the taxes thereon as per the income tax rate applicable, therefore the question of disallowance does not arise. We note that deduction under section 80P is available activity-wise and the rental income is not defined as per the section 80P, however assessee has shown the rental income separately and paid the taxes thereon. Hence, the question of disallowance under section 80P of the Act does not arise, specifically when the assessee has never claimed deduction under section 80P of the Act in respect of the rental income. Therefore, we delete the addition.Decided in favour of assessee. Income from sale of crackers - We note that assessee has never claimed the deduction under section 80P of the Act on account of sale of crackers, hence the question of disallowance does not arise -The Ld. Counsel also took us through paper book page no.31 and stated that assessee has shown the crackers sale separately and the sale of crackers has not included in computing deduction under section 80P of the Act. The assessee has never claimed deduction under section 80P in respect of sale of crackers, therefore disallowance under section 80P of the Act does not arise.Decided in favour of assessee.
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