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2022 (12) TMI 644 - AT - Income TaxDeduction on interest earned from Co-Operative Banks u/s 80P(2)(d) - Dividend Income AND Interest Income earned from another Co-Op Society - HELD THAT:- In our considered view, Ld. CIT(A) has erred in law in holding that the observations in the case of State Bank of India [2016 (7) TMI 516 - GUJARAT HIGH COURT] to the effect that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act have no binding effect on the jurisdictional Revenue Authorities. The Kolktata ITAT in the case of SubhlakshmiVanijya (P.) Ltd. [2015 (8) TMI 174 - ITAT KOLKATA] has held that even the obiter of the jurisdictional High Court has a binding force on the lower authorities. Therefore, in our view, the Ld. CIT(A) has erred in law and in facts in holding that the above order of the jurisdictional Gujarat High Court in the case of State Bank of India [Supra] has no binding effect on the jurisdictional Revenue authorities. In the case of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT] held assessee-cooperative society was 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. In the case of Surendranagar District Co-op. Milk Producers Union Ltd. [2019 (9) TMI 978 - ITAT RAJKOT] held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank. In the case Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] held that the interest income earned by a co- operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Thus in our view, dividend income and interest earned by the assessee on surplus held with cooperative bank would be eligible for deduction under Sec.80P(2)(d) of the Act. Appeal of the assessee is allowed.
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