TMI Blog2020 (9) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... a Co-operative Society engaged in the business of manufacturing of sugar and by-products. As rightly argued by Shri Deepak Garg that the assessee is not under the activities of specified under Clause (d) or (b) of section 80P, but under Clause (c), as discussed above the assessee earned interest and dividend income from Latur District Central Co-operative Bank and Vikas Sahakari Bank Ltd. clearly shows the interest and dividend earned by the assessee are not from Co-operative Society. Therefore, in our opinion the AO on incorrect assumptions of facts without applying correct application of law allowed deduction u/s. 80P2(d) of the Act which clearly reflects non application of mind. Coming to the assessment order passed 143(3) of the Act, we note that there was no discussion nor reference made by the AO to the claim of assessee made u/s. 80P2(d) - AO has not made proper enquiry of the claim made by the assessee in terms of provisions contemplated u/s. 80P - Pr. CIT directed the AO to decide this issue afresh after bringing entire facts on record after affording opportunities to the assessee, in our opinion, the order of Pr. CIT-2 is valid in treating the assessment order complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in the return of income. Further, it was explained that the assessee being a Cooperative Society is entitled to claim deduction u/s. 80P of the Act. The Pr. CIT did not find the submissions of assessee as acceptable and held the order passed by the AO u/s. 143(3) of the Act is erroneous and prejudicial to the interest of justice and directed the AO to decide this issue afresh after bringing entire facts on record. 6. Before us, the ld. AR, Shri Pramod Shingte submits that the Pr. CIT held that the deduction u/s. 80P2(d) of the Act is not allowable for assessee as such the interest and dividend has not earned from Cooperative Society, further, that there was lack of enquiry by the AO in terms of principle laid down by the Hon ble Supreme Court in the case of Totgar s Co-operative Sale Society Ltd. (supra). The assessee is not entitled to claim the interest and dividend earned as deduction as the same were earned from Co-operative Bank. The ld. AR referred to page 102 of the paper book and submitted that the case of assessee was selected for scrutiny on the basis of reasons contained therein. He argued that the assessee submitted all the requirements as sought by the AO in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay) and submitted that the AO has not examined the claim before him in detail and no opinion whatsoever rendered by him on the claim made by the assessee. He argued that the principle laid down by the Honb ble High Court of Bombay in the said case is applicable to the facts on hand. The ld. DR referred to the order of Pune Bench of Tribunal as relied on by the ld. AR and submitted that Pune Bench of Tribunal did not consider the decision of Hon ble High Court of Karnataka in the case of PCIT Vs. The Totagars Co-operative Sale Society reported in (2017) 395 ITR 611 (Karn.) and referred to paras 13, 14 and 15 and argued the AO failed to examine the claim of assessee in terms of principle laid down by the Hon ble High Court of Karnataka, thereby its constitutes no application of mind and assessment made thereon by the AO is erroneous and prejudicial to the interest of revenue. Further, he prayed to consider the copies of decision annexed to the written submissions while deciding the issue on hand and prayed to uphold the order of Pr. CIT. 8. Heard both parties and perused the material available on record. The main contention of ld. AR is that every detail regarding the claim under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of Section 80P of the Act. Even though a cooperative bank may have the corporate body or skeleton of a cooperative society but its business is entirely different and that is the banking business, which is governed and regulated by the provisions of the Banking Regulation Act, 1949. Only the Primary Agricultural Credit Societies with their limited work of providing credit facility to its members continued to be governed by the ambit and scope of deduction under Section 80P of the Act. 14. The banking business, even though run by a Co-operative bank is sought to be excluded from the beneficial provisions of exemption or deduction under Section 80P of the Act. The purpose of bringing on the statute book sub-section (4) in Section 80P of the Act was to exclude the applicability of Section 80P of the Act altogether to any co-operative bank and to exclude the normal banking business income from such exemption/deduction category. The words used in Section 80P(4) are significant. They are: The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society .. . The words in relation to can include within its am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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