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2021 (10) TMI 861 - AT - Income TaxRevision u/s 263 - claim of deduction under section 80P(2)(d) - HELD THAT:- Co-ordinate Bench of Rajkot Tribunal in Surendarnagar District Cooperative Milk Producer Union Ltd. [2019 (9) TMI 978 - ITAT RAJKOT] held the assessee co-operative society could not claim benefit under section 80P(2)(d) in respect of interest earned by it from deposits made with nationalized/private banks, however, the said benefit was available in respect of interest earned and on deposits made with co-operative bank. Thus, in view of the aforesaid legal discussion we are of the considered view that order passed by Assessing Officer is not erroneous, though it may be prejudicial to the interest of the Revenue. Therefore, the twin conditions that orders is erroneous and so far as prejudicial to the interest of revenue, as prescribed under section 263 is not fulfilled in the present case. CIT while revising the assessment order relied on the case law in Totagars Co-operative Sales Society (second case) [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] wherein the Hon'ble Karnataka High Court held that interest earned by a Co-operative Society from surplus deposits kept with Co-operative bank, is not eligible for deduction under section 80P(2)(d). Considering the legal position that when there are conflicting decisions of non-jurisdictional High Courts, on similar issue, the decision of Jurisdictional High Court is having binding precedent. Thus, keeping in view of the decision Hon'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd.(supra) [2016 (7) TMI 1217 - GUJARAT HIGH COURT] wherein the assessee-co-operative society is held eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank, we conclude that the order passed by assessing officer is not erroneous. Hence, the grounds of appeal raised by assessee are allowed.
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