TMI Blog2020 (5) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... RT ] a District Central Co-operative Bank, is also a Society, in which event, the income by way of interest and dividend earned by the assessee/respondent Society from the investments made in Salem District Central Co-operative Bank, which is also a Co-operative Society is entitled for deduction under Section 80 P (2) (a) (i) of the Income Tax Act. Decision relied on by the assessee and considered by the Tribunal squarely applies to the facts on hand - Decided in favour of assessee. - I.T.A. No. 1378/Chny/2019 - - - Dated:- 20-2-2020 - Shri N.R.S. Ganesan, Judicial Member And Shri S. Jayaraman, Accountant Member For the Appellant : Shri. G. Baskar, Advocate And Shri. I. Dinesh, Advocate For the Respondent : Shri. AR.V. Sreeni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a co-operative society as its banking business was stated to be governed by provisions of a special law like Banking Regulation Act, 1949 etc. Therefore, he denied the deduction claimed by the assessee u/s. 80P(2)(d). The Ld. AR submitted that though the assessee has canvassed that the co-operative society is genus term and the co-operative bank is also a specie of cooperative society, the lower authorities have not appreciated the fact and law and denied the deduction claimed by the assessee. 4. The Ld. AR submitted that the Jurisdictional High Court in the case of CIT vs Salem Agricultural Producers Cooperative Marketing Society in TCA No. 5/2015 dated 10.08.2016 and in a host of cases held that the interest received by a co-operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals confirmed the order passed by the Id.CIT (Appeals). We find that in the case of CIT Vs. Kangra Co-operative Bank Ltd. [2009] 309 ITR 106 (HP), the Hon'ble Himachal Pradesh High Court has considered Section 80 P (2) (d) of the Act. The interest earned by the assessee co-operative bank on fixed deposits with Himachal Pradesh State Co-operative Bank in compliance with the provisions of Section 57 of the Himachal Pradesh Co-operative Societies Act, 1968, the income derived from banking business is eligible for deduction under Section 80 P (2) (a) (i) of the Act. Exemption is also available under Section 80 P (2) (d) of the Act. In the present case, the assessee is an Agricultural Producers Co-operative Marketing Society Ltd., register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deducted under Section 80 P (2) (a) (i) of the Act. In fact, in CIT Vs. Nawanshahar Central Co-operative Bank Ltd., [2007] 289 ITR 6, the Apex Court has held that where under the provisions of the Co-operative Societies Act, the co-operative bank is statutorily required to place part of its funds in approved securities, the income attributable thereto is not taxable under Section 80 P (2) (a) (i) of the Income-tax Act, 1961. In the present case, we have noted above that under Section 57, every co-operative Society including the assessee is required by law to keep a percentage of its profits in reserve funds. These reserve funds can only be invested or deposited in a certain manner. Applying the ration of the judgment in Nawanshahar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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