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2024 (1) TMI 1034 - ITAT MUMBAIReopening of assessment u/s 147 - Allowability of deduction u/s 80P(2)(a) or 80P(2)(d) - interest income earned by the assessee from the co-operative banks - HELD THAT:- The reasons state that the benefit of deduction under Section 80P(2)(d) of the Act is not available on interest received from investment made with co-operative banks and therefore, such deduction is required to be disallowed. The impugned assessment order is 2013-14, the notice u/s 148 of the Act was issued on 31st March, 2019. There was no tangible material available with AO to reopen the concluded assessment year beyond four years. Thus, the reopening has been made merely on reappraisal of facts available in the original assessment proceedings culminating into an assessment order under Section 143(3) of the Act. Therefore, the assessee succeeds on ground no.1 itself. Deduction 80P(2)(a) - The provisions of Section 80P (4) of the Act specifically denies deduction only to co-operative banks. The assessee is admittedly not a co-operative bank. AO instead of treating the assessee as credit co-operative society considered the assessee as primary co-operative bank without any basis. In view of the above facts, we hold that interest income earned by the assessee on fixed deposits with the co-operative banks are eligible for deduction under Section 80P(2)(d) of the Act. We also find that in case of Kerala State Co-Operative Agricultural & Rural Development Bank Ltd [2023 (9) TMI 761 - SUPREME COURT] where in decision of Mavilayi Service Co-operative Bank Ltd [2021 (1) TMI 488 - SUPREME COURT] has also allowed the claim of assesses u/s 80P (2) (d) of the Act. Thus, now the issue is squarely covered in favour of the assessee. In view of this on both the grounds of reopening as well as on the merits the orders of the lower authorities are reversed and the learned Assessing Officer is directed to grant assessee’s deduction under Section 80P(2)(d) of the Act. Accordingly, the appeal of the assessee is allowed.
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