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2022 (8) TMI 597 - AT - Income TaxDeduction of the interest on bank deposits u/s.80P(2)(a)(i) - HELD THAT:- As in the case of the assessee before us the surplus funds parked by way of short-term deposit with the co-operative bank, viz. Jila Sahakari Kendriya Bank are inextricably interlinked, or in fact interwoven with its business of providing credit facilities to its members, therefore, the same as claimed by the Ld. AR, and rightly so, would duly be eligible for deduction u/s. 80P(2)(a)(i). We, thus, in terms of our aforesaid observations, direct the AO to allow deduction u/s. 80P(2)(a)(i) on the interest income earned by the assessee society on its deposits with the co-operative bank.Ground of appeal No.1 raised before us is allowed. Deduction of the income from paddy procurement business u/s 80P(2)(a)(iii) - HELD THAT:- We, though concur with the claim of the AR that the assessee society is entitled for deduction of its income from paddy procurement business u/s.80P(2)(a)(iii), but restore the matter to the file of the A.O for the limited purpose of restricting the said claim of deduction to the extent of the profit relatable to the marketing of the agricultural produce of the members of the assessee society. In the course of the set-aside proceedings the AO shall re-adjudicate the assessee’s claim for deduction under Sec. 80P(2)(a)(iii) i.e. after determining as to what extent the assessee society had facilitated the marketing of the agricultural produce grown by its members, and thus, restrict it’s claim for deduction u/s. 80P(2)(a)(iii) only to the extent of the profit relatable thereto. The assessee shall in the course of the set-aside proceedings furnish the requisite details/documents that are called for by the A.O. Addition on account of TDS on commission received from paddy procurement business - HELD THAT:- As stated by the ld. AR, and rightly so, the Tribunal in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors [2022 (3) TMI 75 - ITAT RAIPUR] had after necessary deliberations on the issue in hand remanded the matter to the file of the A.O, with a specific direction i.e, to restrict its claim for deduction as regards its profit from PDS only to the extent of its net profit i.e., after considering the proportionate expenses. We on the same terms restore the matter to the file of the AO, with a direction to restrict the assessee’s claim for deduction as regards its profit from PDS only to the extent of its net profit i.e., after considering the proportionate expenses. Thus, the Ground of appeal No.1 (iv) is allowed for statistical purposes. Entitlement of a co-operative society for claim of deduction u/s 80P(2)(d) qua the dividend received on shares of a co-operative bank is squarely covered by the aforesaid decision of the Tribunal in [2022 (3) TMI 75 - ITAT RAIPUR] therefore, principally concurring with the claim of the ld. AR we herein vacate the disallowance of the assessee’s claim for deduction u/s 80P(2)(d) qua the dividend received on shares of a co-operative bank, viz. Jila Sahakari Bank. Thus, the Ground of appeal No.1(v) raised in appeal by the assessee is allowed in terms of our aforesaid observations.
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