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2019 (10) TMI 759 - ITAT JAIPURDeduction u/s 80P - interest on FDRs placed by the assessee society with such cooperative society - Whether by virtue of provisions of Section 80P(4) the claim of the assessee under section 80(P)(2)(d) can be denied to the assessee society? - HELD THAT:- For the purposes of section 80P(2)(d) of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co-operative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) The Coordinate Bench in case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. vs Income-tax Officer-21(2)(1), Mumbai [2018 (4) TMI 1678 - ITAT MUMBAI] had an occasion to examine similar contention and it was held that though the co-operative bank pursuant to the insertion of Sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, however, as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of co-operative societies, therefore, the interest income derived by a cooperative society from its investments held with a co-operative bank, would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. We see no reason to deviate from the same and agree with the aforesaid view taken by the Co-ordinate Bench By virtue of provisions of Section 80P(4) of the Act, the claim of the assessee under section 80(P)(2)(d) cannot be denied to the assessee society. Another issue that arise for consideration is whether deduction u/s 80P(2)(d) shall be allowed on the gross interest income on FDRs or it should be allowed on the net interest income calculated after deducting the interest expenditure allocable to funds placed in form of FDR. Though the assessee has challenged the findings of the ld CIT(A) to the effect that it has not incurred any interest expenditure, we find that there is no necessity to examine the same as conceptually, the deduction under section 80P(2)(d) has to be allowed on gross and not on net interest income as held by the Hon’ble Gujarat High Court in case of Surat Vankar Sahakari Sangh Ltd vs ACIT [2016 (7) TMI 1217 - GUJARAT HIGH COURT] The assessee society is held eligible for deduction under section 80P(2)(d) in case of interest income on FDRs placed with Jaipur Central Cooperative Bank Ltd.- Decided in favour of the assessee
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