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TMI Blog2017 (3) TMI 1728X X X X Extracts X X X X X X X X Extracts X X X X ..... d of appeal raised by the assessee read as under:- 1. "On the facts and in the circumstances of case and in law, the Hon. CIT(A) has erred in upholding that the appellant is not eligible for deduction u/s. SOP(2)(d) of the I.T.Act,1961 at Rs. 27,41,747/- relying on the decisions of the Hon. ITAT, Ahmedabad in the case of SBI Employees Cooperative Credit Society Ltd. (2015) 57 taxman.com 367 and the Hon. ITAT, Mumbai Bench in the case of Shri Saidatta Cooperative Credit Society Ltd. Vs. ITO in ITA No.2379/Mum/2015 without appreciating that the Hon. ITAT, A- Bench, Mumbai in the case of Lands End Cooperative Housing Society Ltd. In ITA No.3566Mum/2014, wherein on an identical issue i.e. claim of deduction u/s.SOP(2)(d) of the Act in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve bank has been held to be eligible for exemption under section80P(2)(d) of the Act . By referring to the discussion made by the Tribunal, the Ld. Representative for the assessee pointed out that even the judgment of the Hon'ble Supreme Court in the case of Totagar's Cooperative Sales Society Ltd. vs. ITO,322ITR 283(SC) has been considered. 4. On the other hand, Ld. Departmental Representative pointed out that the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. Vs.ITO in ITA No. 2379/Mum/2015dated 15/1/2016(supra)is to the contrary and, therefore, the CIT(A) was justified in denying the claim for exemption under section 80P(2)(d) of the Act. 5. We have carefully considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in carrying on business of banking or providing credit facilities to its members and consequently no deduction is allowable u/s 80P(2)(a)(i) of the Act. Whereas in the case before us the issue is whether a co-operative society which has derived income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) of the Act provide deduction in respect of income by way of interest or dividend on investments made with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect of income of co-operative Societies. 1. Where, in the case of an assesssee being a co-oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the banking or providing credit facilities to its members and has income assessable under the head business whereas for claiming u/s 80P(2)(d) it must have income of interest and dividend on investments with other Co-operative society may or may not be engaged in the banking for providing credit facilities to its members and the head under which the income is assessable is not material for the claim of deduction under this section. Now will evaluate the assessee's case in the light of the decision of the Hon'ble Supreme court. The Honble Supreme Court in the case of Totagar's Co-operative Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the society is engaged in the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to by the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. (supra). In our view, the reliance placed by the CIT(A) on the judgment of the Ahmedabad Bench of the Tribunal is quite untenable, inasmuch as, in the said case the interest income in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co-operative society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act. Further, the reliance placed by the CIT(A) on the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd.(supra) is also of no avail, inasmuch as, the Bench merely set-aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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