TMI Blog2016 (6) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... ided in favour of assessee. - ITA No.1677/PN/2014, ITA No.1567/PN/2014 - - - Dated:- 17-6-2016 - Ms. Sushma Chowla, JM Appellant by से : Shri Nikhil Pathak, Shri V.G. Ginde Respondent by : Shri Anil Chaware ORDER Sushma Chowla, JM: Both the appeals filed by the different assessees are against separate orders of CIT(A), Kolhapur, dated 09.06.2014 and 24.06.2014 relating to assessment year 2011-12 against respective orders passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. Both the appeals relating to different assessees on similar issue were heard and are being disposed of by this consolidated order for the sake of convenience. However, reference is being made to the facts in ITA No.1677/PN/2014 to adjudicate the issue. 3. The assessee in ITA No.1677/PN/2014 has raised the following grounds of appeal:- 1] The learned CIT(A) erred in confirming the disallowance of deduction u/s 80P in respect of the interest income of ₹ 24,60,355/- and dividend income of ₹ 3,75,003/- received by the assessee co-operative society on investments made in bank account and shares of Sindhudurg Central Co-operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 24.09.2014, wherein the said credit co-operative society had also made the investment in deposits and shares of Sindhudurg Central Co-operative Bank and the Tribunal held that the assessee was eligible to claim the deduction under section 80P(2)(d) of the Act. The Tribunal also held that Sindhudurg Central Co-operative Bank was a co-operative society and as such on its investment, the assessee was entitled to claim the deduction under section 80P(2)(d) of the Act. Further, reliance was placed on the ratio laid down by Pune Bench of Tribunal in Sindhudurg District Primary Teachers Co-operative Credit Society Ltd. Vs. ITO in ITA No.31/PN/2014 with consolidated order in Veejmandal s Workers Federation Sahakari Patsanstha Maryadit Vs. ITO and Sindhu Bank Staff Co-operative Credit Society Ltd. Vs. ITO in ITA Nos.29/PN/2014 and 30/PN/2014 respectively, relating to assessment year 2010-11, order dated 24.12.2014. 6. Briefly, in the facts of the case, the assessee was a co-operative credit society registered under the Maharashtra Co-operative Societies Act. The main object of the assessee society was to provide credit facilities to its members and interest on the said loan advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The Tribunal in turn, relied on the ratio laid down by co-ordinate Bench of Tribunal in ACIT Vs. M/s. Janata Grahak Madhyavarti Sahakari Sangh Maryadit in ITA No.571/PN/2013, relating to assessment year 2009-10, order dated 27.11.2013. The relevant findings of the Tribunal are as under:- 7. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. The Ist dispute in the grounds of appeal is regarding the allowability of deduction u/s.80P(2)(d) in respect of interest income of ₹ 31,77,452/- and dividend income of ₹ 5,41,667/- received by the assessee cooperative society on investment made in deposits/savings accounts and shares of Sindhudurg Central Cooperative Bank. According to the Assessing Officer the deduction is allowable u/s.80P(2)(d) in case of a cooperative society for receiving any interest or dividend income from any other cooperative society. Since the same has been received from a cooperative bank which is distinct from a cooperative society, therefore, the assessee is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as withdrawn the deduction to the co operative bank other than primary agricultural credit society or a primary co-operative agricultural and rural development bank w.e.f. the A.Y. 2007 -08. The said provision is applicable to the Aurangabad District Central Co-operative Bank (ADCCB) in which the assessee society has kept deposit. The withdrawal of deduction by insertion of Sub-section (4) of Sec. SOP does not change status of Aurangabad District Central Co-operative Bank as a co-operative society which is contemplated in Sec. 80P(1) of the Act. We, therefore, hold that the interest received on the deposit with the Aurangabad District Central Co-operative Bank by the assessee on the deposits are squarely covered u/s. 80P(2)(d) and the interest received on deposit kept with the Aurangabad District Central Cooperative Bank is an allowable deduction. So far as the finding of the Ld. CIT(A) that the provisions of Sec. 80P(2)(a)(i), in our opinion the decision of the Hon'ble Supreme Court in the case of Totagars Cooperative Vs. ITO (supra) is against the assessee as interest received on deposits with Aurangabad District Central Co-operative Bank cannot be said to be the income de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because it is engaged in the business of banking that would not change the eligibility for the assessee to claim the deduction u/s. 80P(2)(d) of the Act. We find force in the argument of the Ld. Counsel. The relevant part of Sec. 80P(2)(d) of the Act reads as under: 80P(1): Where, in the case of an assessee being a cooperative society, the gross total income includes any income referred to in subsection (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee. 80P(2): The sums referred to in sub-section (1) shall be the following, namely: (a) ........... (b) ........... (c) 2(d): In respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other cooperative society, the whole of such income; 4. We also find that deduction u/s. 80P(2)(d) claimed of the assessee is well supported by the decision of the ITAT, Chandigarh in the case of Punjab State Federation of Co-operative House Building Societies Ltd. Vs. Income Tax Officer 2 ITD 617 (Chd.). There is no ambiguity in the langu ..... 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